Having announced in November last year that it intended to become the major shareholder in Asiana Airlines Inc with a US$1.59 billion investment. Korean Air Lines (Korean Air) has revealed that it anticipates that two years after the purchase has been concluded the two rival airlines will be integrated. In addition, Korean Air intends to merge its low-cost carrier Jin Air with Asiana’s two low-cost carriers, Air Busan and Air Seoul, to create a single budget airline that will maximize the advantages of economies of scale. “By consolidating these three airlines, it can become a top-level low-cost airline not only in Korea, but also in Asia,” Korean Air President Woo Keehong said.
Korean Air anticipates receiving competition approval from nine countries by the end of 2021. The merged carriers will aim to integrate their large aircraft fleets, some of which have different engine types for the same aircraft model, Woo said, adding that it would be easier to phase out Asiana’s planes because a large number of them had leases which are due to expire within the next five years. There are approximately 1,200 roles which will overlap between the airlines, but Korean Air hopes to resolve the problem through attrition and retirements as opposed to redundancies.
