Asiana Airlines Shareholders Approve Merger with Korean Air
Key Takeaways
- •Asiana Airlines shareholders approved the merger with Korean Air, finalizing a $1.6 billion acquisition process that began in November 2020.
- •The merged carrier will rank as the world's 10th-largest airline by fleet size and is scheduled to launch under the Korean Air name on December 17.
- •Korean Air resolved antitrust concerns from multiple jurisdictions by agreeing to divest cargo and passenger route rights to competing airlines.
- •The integration requires merging mileage programs and transitioning between the rival SkyTeam and Star Alliance networks, pending Fair Trade Commission approval.
- •The Asiana Airlines brand will be permanently retired once the merger is completed.
Asiana Airlines Inc., South Korea's second-largest carrier, announced Wednesday that its shareholders have approved the company's merger with larger rival Korean Air Co., concluding an acquisition process spanning nearly six years.
The approval came at an extraordinary shareholders' meeting convened to vote on the merger. An overwhelming majority of shareholders voted in favor of the deal with the national flag carrier, a company spokesperson confirmed.
Korean Air first announced its plans to acquire Asiana in November 2020, in a transaction valued at 1.8 trillion won ($1.6 billion). The deal was initiated during the COVID-19 pandemic, which had devastated global aviation demand and strained both carriers' finances. The combined carrier is expected to rank as the world's 10th-largest airline by fleet size, creating a dominant player in Northeast Asia's competitive aviation market.
The protracted timeline reflected extensive regulatory scrutiny from multiple jurisdictions, including the United States, the European Union, and China, all of which examined the merger's potential impact on competition on transpacific and intra-Asian routes. Korean Air addressed antitrust concerns by agreeing to divest cargo and passenger route rights to competitors.
"A mega-carrier to be created through the merger will be the first step toward writing a new history in South Korea's aviation industry," Asiana Chief Executive Officer Song Bo-young told reporters on the sidelines of the shareholders' meeting.
Regarding the integration of the two airlines' mileage programs, Song stated that preparations are underway and that the company is awaiting a decision from the Fair Trade Commission. The integration presents a complex operational challenge, as Korean Air is a founding member of the SkyTeam alliance while Asiana belongs to the rival Star Alliance, requiring a transition that will affect codeshare partnerships and passenger benefits across both networks.
The two carriers signed a formal merger agreement in May. The merged entity, which will operate under the Korean Air name, is scheduled to launch on December 17. The Asiana Airlines brand will be retired.
Also on Wednesday, Korean Air was expected to hold a board meeting to finalize the merger with Asiana. (Yonhap)
