After two days of board meetings, the directors of Asiana Airlines (OZ, Seoul Incheon) have failed to decide on the sale of the carrier's cargo arm, deciding to reconvene a meeting on November 2, 2023, to keep considering the matter.
Asiana is the subject of a takeover/merger bid by larger rival Korean Air (KE, Seoul Incheon) and that airline wants Asiana to divest its cargo business in order to secure merger approval from European Commission authorities. Earlier this month, ch-aviation reported that Korean Air had offered the Asiana board an immediate payment of KRW150 billion (USD111 million) if they agreed to sell their cargo business. More recently, Korean media have reported that Korean has offered cash-strapped Asiana a further KRW500 billion (USD370 million) in long-term loans, contingent on selling the cargo arm.
Korean Air had planned to submit a so-called corrective action plan to the European Commission by the end of October. However, following Asiana's failure to decide, it will refer the matter to its board of directors to set a new date. Korean media report the Asiana board meetings were "heated," with some board members arguing the cargo divestment could constitute a breach of trust and the long-term costs would outweigh the benefits. Asiana's six-person board was reduced to five before the first meeting on October 30 after one executive director resigned in protest before the meeting began. Asiana's union and several former CEOs have also expressed their opposition to the divestment.
Meanwhile, should Korean Air get its way, three local low-cost carriers have formally expressed interest in acquiring Asiana's cargo business namely Air Premia, Eastar Jet, and cargo operator Air Incheon. t'way Air had expressed interest but was reportedly left off the shortlist. As a likely consolation prize, that airline is set to acquire five passenger-configured A330-200s from Korean Air, plus the necessary pilots and support services, and start operating passenger flights into certain European Union airports.
As Korean Air attempts a last-ditch appeal to persuade the European Commission to approve the merger, sources have advised ch-aviation that any of Korean's key concessions - selling Asiana's cargo arm and facilitating t'way Air's entry into the European market, is dependant on approval and will not happen until after approval is secured.
