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A few weeks ago, I wrote about Korean Air’s planned $1.1 billion takeover of Asiana Airlines that was first announced in November 2020. The pandemic delayed the merger, but it’s now officially moving forward after the US Department of Justice (DOJ) signed off (it was the 14th of 14 regulatory authorities that needed to approve it).
Korean Air will become Asia’s second-biggest airline group based on capacity (after Singapore Airlines) and the 10th-largest globally. The airline will own a 63.88% stake in Asiana Airlines and the rival carrier’s effective owner. In order to gain approval, Korean Air had to sell Asiana’s cargo business to Air Incheon and transfer four commercial routes where the two carriers overlapped to low-cost carrier, T’way Air.
Under the merger plans, Korean Air will keep Asiana as a subsidiary for two years before absorbing it into its brand. The combined entity will have 30,000 employees and 230 aircraft in its fleet. As noted by Lucky at One Mile at a Time, South Korea currently has two full-service airlines and a population around 50 million. This makes it one of the few countries in the world that operates two carriers.
To further complicate the merger, both carriers operate low-cost subsidiaries. Korean Air owns Jin Air and Asiana has both Air Busan and Air Seoul. Jin Air will absorb Air Busan and Air Seoul, which will make it quite a bit larger than its competitors Jeju Air and T’Way Air.
In terms of airline alliances, Korean Air is a member of SkyTeam and Asiana belongs to Star Alliance. Asiana will leave Star Alliance given how closely Korean Air partners with Delta Air Lines (the two have a joint venture). Asiana has always felt a bit like the odd man out in Star Alliance and has been overshadowed by ANA and Singapore Airlines for years.
Anthony’s Take: This makes financial sense as Asiana has struggled for years and a combined entity will be stronger. With SkyTeam soon to lose ITA Airways when it moves to Star Alliance post Lufthansa acquisition and this shift, both alliances will see net neutral changes to their airline counts.
(Image Credits: Korean Air and Asiana Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
