This article was posted on the ChosunBiz MoneyMove (MM) site at 4:13 p.m. on Oct. 10, 2025.
As "real estate rich" Tire Bank acquired the remaining equity in hybrid carrier (low-cost long-haul carrier) Air Premia, it secured 70% of the management equity together with affiliate AP Holdings. Tire Bank nearly engaged in a management rights dispute with Daemyung Sono Group over Air Premia, and after Chairman Kim Jeong-gyu of Tire Bank was jailed there were rumors that it would give up the acquisition, but it ultimately obtained firm management rights as planned.
Now the remaining task for Tire Bank and Air Premia is to complete a paid-in capital increase and a capital reduction totaling about 100 billion won by the end of the year. Air Premia urgently needs a paid-in capital increase after being hit on U.S. routes by the U.S. government's visa policy. However, Chairman Kim has a negative view of raising capital, and the atmosphere makes attracting outside investment difficult. That raises interest in how Air Premia will raise funds.
According to the investment banking (IB) industry, Tire Bank Group, the largest shareholder of Air Premia, is expected to carry out a paid-in capital increase and a capital reduction of 50 billion to 100 billion won by the end of the year.
An industry official said, "Tire Bank is trying to raise money in the market and is looking around, but I understand there is no one stepping forward yet."
Air Premia is currently in a state of capital erosion. Capital erosion means the total capital (net worth) is less than the paid-in capital. The paid-in capital amounts to 146.8 billion won, and the total capital was only 27.2 billion won at the end of last year. In such companies it is common to carry out a paid-in capital increase and a capital reduction at the same time. The capital reduction cuts paid-in capital and deficits, and the capital increase secures funds.
Air Premia has been emphasizing U.S. routes, and analysts say it took a direct hit from the Trump administration's visa policy. The U.S. government recently announced a rule that would require an additional $100,000 payment for new H-1B professional visa applications and limit the duration of student and exchange visas to a maximum of four years. This increases the likelihood of reduced dispatches of Korean corporations' staff to the U.S. and lower demand for studying abroad. Passengers traveling for business or study purposes could lead to lower loads on U.S. routes and more reservation cancellations.
The aviation industry estimates Air Premia's U.S. route load factor could fall to 30%–40%. Given the high chance this situation will continue through the end of the year, the capital increase must be completed urgently.
But aviation and IB industry officials say major investors are reluctant to participate in the paid-in capital increase because they fear Chairman Kim's legal risks. Kim is accused of evading tens of billions of won in taxes by disguising dealership names, and in July he was sentenced to three years in prison at the appellate trial and was jailed.
Chairman Kim is actively involved in management even while detained. It is reported that he received frequent reports from prison about the acquisition of the remaining equity in Air Premia.
Raising funds externally is not easy, and there remains the issue of persuading the owner. An IB industry official said, "I understand it will not be easy to persuade Chairman Kim to issue new shares because Tire Bank has already invested 140 billion won in buying existing shares and would need to spend an additional 100 billion won to issue new shares."
Meanwhile, it is reported that Chairman Kim has decided to postpone plans to gift assets to his daughters for the time being. Tire Bank Group originally planned to name the unlisted company Seonggong-eul Mandeuneun, which is 100% owned by Kim's three daughters, as the purchaser in the remaining equity acquisition contract, but in the end Tire Bank acquired the remaining equity.
Since Chairman Kim has already been sentenced to three years in prison for tax evasion and jailed, it is reported that he chose not to take on another "tax risk." Given that Kim was born in 1965 and is still relatively young and his three daughters were born in the 2000s and have time, he reportedly plans to focus on directly managing and growing Air Premia.