Korean Air to buy Asiana Airlines

The owner of Korean Air, Hanjin KAL Corporation, has announced it has agreed to buy rival Asian Airlines in a transaction worth USD 1.6 billion. The deal is supported by the, state-owned, Korean Development Bank.

Asiana Airlines is financially struggling, especially after a previous planned take-over by Hyundai Development Company and Mirae Asset Daewoo fell through in September. Due to the deal collapsing, state-owned banks Korean Development Bank and Export-Import Bank of Korea invested in the airline to keep it afloat, but also ended up as major stakeholders.

Both Korean airlines have been heavily impacted by the Corona-pandemic and currently operate a fraction of their normal network. Korean Air has around 60 planes of its 170-strong fleet parked, while Asiana has parked more than 20 of its 80 aircraft.

Hanjin KAL has said that having two full-size airlines didn't make sense for the size of the country and that it gave a big disadvantage in competing with countries like Singapore, Germany and France. With this take-over, Korean Air will increase its competetiveness due to the coming expansion of routes, capacity and fleet.

Looking at the wording of the press-statement from Hanjin KAL, it seems Korean Air will be the remaining brand, but this hasn't been confirmed so far.

The deal will now be brought to the Korea Fair Trade Comission for approval, which is expected to give its opinion in the coming months.