Korean Air will expand its global footprint with the acquisition (Photo: Korean Air)
Korean Air, the flag carrier of South Korea, says it has completed its acquisition of Asiana Airlines, four years after announcing its decision on November 16, 2020.
In a press statement, Korean Air says that on December 12, Korean Air acquired 131,578,947 newly issued shares of Asiana Airlines, representing a 63.88 pc ownership stake and making Asiana Airlines a subsidiary of Korean Air.
It adds that the completion follows final payment of KRW 800 billion (USD 560 million) by Korean Air to Asiana Airlines earlier this week, concluding the share purchase transaction. This brings the total investment through the third-party allotment capital increase to KRW 1.5 trillion, including the previously paid deposit of KRW 300 billion and interim payment of KRW 400 billion, says the airline.
The statement adds that Asiana Airlines will hold an extraordinary general meeting of shareholders on January 16, 2025 to appoint new Board of Directors nominated by Korean Air.
Korean Air says it plans to complete the integration with Asiana Airlines within two years. The integration strategy includes network optimisation through diversified flight schedules on overlapping routes, service expansion to new destinations and enhanced safety investments. It says that the merger aims to strengthen national aviation industry competitiveness, enhance the hub capabilities and expand global network reach of Incheon Airport, the largest airport in South Korea located in capital Seoul.
The airline says that the integration will proceed without workforce restructuring. The combined organisation projects natural staff growth through business expansion, with employees in overlapping functions being reassigned within the organisation. The integrated frequent flyer programme framework will be submitted to the Korea Fair Trade Commission by June 2025 and that the programme details will be communicated to customers following regulatory review.
The airline says that the acquisition represents a strategic milestone for Korea’s aviation industry. Korean Air will proceed to implement measures to strengthen the country’s aviation capabilities and enhance its competitive position in the global market.