More than four years after it was first announced, Korean Air (KE, Seoul Incheon) has completed its acquisition of Asiana Airlines (OZ, Seoul Incheon). The airline said it had paid the final KRW800 billion won (USD558 million) on December 12 after the US Department of Justice decided not to contest the deal. Korean Air first announced the planned merger on November 16, 2020.
Korean Air has paid KRW1.5 trillion (USD1.05 billion) for 131,578,947 newly issued shares, or 63.88% of its smaller rival. The airline says the merger aims to strengthen the country's aviation industry competitiveness, boost Incheon Airport's hub capabilities, and grow global network reach.
The merger required the approval of antitrust agencies from 14 jurisdictions, with the DOJ the last to green light it. The agency's approval was signalled by its decision not to undertake legal action to prevent the merger.
The two airlines will take two years to fully integrate. The integration strategy includes resolving flight schedule conflicts on overlapping routes, expanding into new markets, and making new safety investments. Measured by weekly seat capacity, the enlarged Korean Air will become the world's 11th biggest operator.
In response, Korean government agencies have established protocols to monitor Korean Air's compliance with the merger conditions and its impact on smaller operators.
Reuters reported that South Korea's transport ministry will offer additional traffic rights to local low-cost carriers in a bid to keep the sector competitive. The Fair Trade Commission will actively monitor compliance, including an agreement not to cut capacity by more than 10% on certain key routes.
"The integration will proceed without workforce restructuring," a December 12 Korean Air statement reads. "The combined organisation projects natural staff growth through business expansion, with employees in overlapping functions being reassigned within the organisation. The integrated frequent flyer programme framework will be submitted to the Korea Fair Trade Commission by June 2025."
Asiana Airlines says it will hold an extraordinary shareholder meeting on January 16 to appoint a new Korean Air-nominated board of directors.
