Citing investment bank industry sources, South Korea's Maeil Business News is reporting that Fly Gangwon (Yangyang) is going up for sale and Samjeong KPMG and KR&Partners have been appointed to handle the transaction, which will include a capital raising and management change.
The capital raising - the amount is as yet unspecified, will involve the issuance of new shares. Several large entities are reporting eyeing the low-cost carrier which is beginning to revive after experiencing financial difficulties during Covid-19.
Fly Gangwon operates a small fleet of one leased A330-200 and two leased B737-800s which it flies from its Yangyang base to Yeosu/Suncheon, Tokyo Narita, Taipei Taoyuan, Jeju, Ho Chi Minh City, Angeles City Clark International, and Hanoi Noi Bai International. The airline expects to carry its 1,000,000th passenger in 3Q this year. However, the past few months have been turbulent for the airline. Its licence to fly international sectors was under threat because South Korea sets a minimum fleet size (five aircraft) to secure and maintain approval for international flights. There are also reports Fly Gangwon will depart its Yangyang base and rebrand. This is despite local government authorities around Yangyang subsidizing the airline to operate out of there. Meanwhile, with China again open to airline traffic, Fly Gangwon is eyeing an expansion into that market as well as operating a dedicated freighter service into Taiwan and Vietnam.
Privately held, Fly Gangwon's current majority shareholder is Joo Won-seok,who is also the airline's CEO and via his company, Ayum, holds a 44.2% stake. The next biggest shareholder is Seven Bridges Private Equity with a 5.71% stake. If the sale proceeds, it will be the second sale of a South Korean low-cost carrier this year, with Eastar Jet (ZE, Seoul Gimpo) changing hands in January.
It is not known what impact any sale will have on Fly Gangwon's goal of serving ten airports in mainland China within the year. However, as news broke concerning Fly Gangwon's impending sale, the airline confirmed that it had completed preparations to bring its A330-200, HL8512 (msn 1261), into service operating flights between South Korea and Taipei Taoyuan and Hanoi Noi Bai International. Since taking delivery of the aircraft in November, Fly Gangwon has inducted the plane and received the necessary Ministry of Land, Infrastructure and Transport (MLIT) permits. The A330-200 can carry 20 tonnes of freight in its belly hold.
Initially launching on the Yangyang - Jeju on February 14, Fly Gangwon says it will start daily roundtrip A330-200 flights to Taipei and 4x weekly flights to Hanoi in early March. The airline has secured two-year cargo contracts to fill the plane's belly hold and diversify the revenue stream away from purely passenger operations. Fly Gangwon says it still plans to introduce an additional A330 or B737 aircraft later this year to further support and grow cargo operations.
