Korean Air has completed its long-awaited acquisition of Asiana Airlines, solidifying its position as one of Asia's largest carriers. The 1.8 trillion won (US$1.26 billion) deal, which has been in progress for four years, is the longest airline merger in history. Initially announced during the COVID-19 pandemic, the merger aimed to rescue Asiana Airlines, which was burdened with substantial debt and struggling amid a dramatic drop in demand.
To address competition concerns raised by regulatory authorities worldwide, Korean Air had to make considerable concessions, including relinquishing certain routes to other airlines and selling Asiana's cargo operations. On Thursday, Korean Air acquired a 63.88% stake in Asiana, making it a subsidiary three years later than initially expected by Asiana.
The expanded Korean Air group now holds over half of South Korea's passenger capacity and ranks as the 12th-largest airline globally by international capacity. In terms of revenue, it now stands among the Asia-Pacific region's top carriers, alongside China's state-owned airline giants, according to 2023 financial data.
Korean Air has assured that Asiana's integration will not lead to layoffs. Asiana will operate as a subsidiary for up to two years before the two airlines fully merge under the Korean Air name, which will feature refreshed branding. Plans also include creating a unified low-cost carrier by integrating the low-cost subsidiaries of both airlines.
Korean Air's strategy focuses on streamlining flight schedules on overlapping routes, introducing new destinations, and continuing investments in safety measures. Additionally, the two airlines' frequent flyer programmes are set to merge, with a proposal to be submitted to the Korea Fair Trade Commission by June 2025 for approval.
