Korean Air, Asiana to finally merge on Dec. 17, six years after acquisition deal

Korean Air and Asiana Airlines will finally emerge as an integrated flag carrier on Dec. 17, nearly six years after Korean Air first announced its acquisition of Asiana Airlines in 2020.

The two carriers will sign the formal merger contract on Thursday, following the respective boards of directors' approval of the merger agreement on Wednesday, the airlines said the same day

Under the merger, Korean Air will take over all of Asiana Airlines’ assets, liabilities, rights and obligations. The merger ratio will be 1 share of Korean Air to 0.2736432 shares of Asiana Airlines.

Korean Air’s capital is expected to increase by about 101.7 billion won ($68.2 million).

The two airlines plan to complete the integration process after obtaining government approval from the Ministry of Land, Infrastructure and Transport and revising their operational specifications.

Korean Air will apply to the ministry for merger approval on Thursday and plans to begin procedures next month to revise operational standards required to establish an integrated flight operations system.

Asiana Airlines plans to hold an extraordinary shareholder meeting in August to vote on the merger proposal. On the other hand, Korean Air plans to conduct the transaction as a small-scale merger under Korea’s Commercial Act. Under these provisions, Korean Air will proceed through a board resolution without holding a general shareholder meeting.

The merger between Korean Air and Asiana Airlines was pushed forward as part of a government-led restructuring of the aviation industry following the Covid-19 pandemic. At the time, the government and creditor banks provided policy financing totaling 3.6 trillion won to help stabilize the financially troubled Asiana Airlines.

Korean Air said the launch of the integrated carrier will accelerate efforts to strengthen flight safety systems and customer services. The airline plans to enhance competitiveness in the global aviation market by reorganizing overlapping routes, expanding new routes, revamping airport lounges and improving in-flight meals.

The two airlines are also continuing discussions with relevant authorities, including the Fair Trade Commission, on a plan to integrate their mileage programs.

Korean Air is also increasing its investments to prepare for a larger fleet and route network following the merger. The airline has remodeled its operations control center and cabin crew training center at its headquarters in western Seoul’s Gangseo District and is also expanding maintenance hangars and engine maintenance facilities near Incheon International Airport.

“The integration will elevate Korean Air’s global market presence and establish Incheon International Airport as a dominant global hub through optimized network connectivity and increased transit efficiency,” Korean Air said in a press release.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY PARK YOUNG-WOO [[email protected]]