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Korean Air announced its planned $1.1 billion takeover of Asiana Airlines in November 2020. The pandemic delayed the merger, but now it’s back on track with 13 out of 14 countries having approved it and the US Department of Justice (DOJ) being the last hurdle to overcome.
Airways Magazine reports that all conditions set by the European Union (EU) have been met and since no legal action has been filed by the US DOJ, it’s expected to be approved. In order to gain EU 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 change, 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.
2 comments
There are at three Asiana Business Class lounges, all in T1 and all accessible with PP. However, you have to be flying a Star Alliance carrier. They are going to be pretty quiet places after this merger.
Correction:
At ICN, there are at three Asiana Business Class lounges, all in T1 and all accessible with PP. However, you have to be flying a Star Alliance carrier. They are going to be pretty quiet places after this merger.