Korean Air has completed the corporate merger process with Asiana Airlines, which has lasted for over four years, on the 11th. With the payment of the remaining balance on this day, Korean Air will become the largest shareholder of Asiana Airlines starting from the 12th, the date defined in the Commercial Act. For the next two years, Korean Air plans to operate Asiana Airlines as a subsidiary and will sequentially proceed with brand integration, consolidation of the three low-cost carriers (LCCs), and mileage organization work.
According to the aviation industry on the 11th, Korean Air held a board meeting that day and resolved to approve the subscription of new shares by Asiana Airlines. On this day, Korean Air will pay 800 billion won as the final payment for the third-party allocation of shares by Asiana Airlines and will receive 13,157,000 new shares, securing a 63.9% equity and becoming the largest shareholder. Korean Air had previously paid 300 billion won as a deposit in December 2020 and 400 billion won as an interim payment in March 2021.
Initially, Korean Air set the deadline for the new share acquisition as the 20th of this month but advanced the schedule ahead of the original plan. On the 28th of last month, the European Commission approved the corporate merger, and the U.S. Department of Justice (DOJ) also effectively decided to approve the merger, accelerating the process. Unless the U.S. competition authorities raise objections through antitrust lawsuits before the acquisition of new shares is completed, it will be interpreted as a final approval of the corporate merger.
Korean Air plans to focus on resolving the remaining tasks after the merger with Asiana Airlines. It is expected that Korean Air will appoint a representative director and executive team to lead Asiana Airlines, which is a subsidiary. Asiana Airlines plans to hold an extraordinary general meeting of shareholders on January 16 next year and proceed with the board member appointment process.
The mileage integration policy, which is the top concern of consumers, is expected to be announced in June next year. Korean Air must submit the mileage integration plan to the Fair Trade Commission within six months from the time it integrates Asiana Airlines as a subsidiary. The Fair Trade Commission has imposed clauses that prohibit unfavorable changes compared to the system implemented in 2019 and unfavorable changes after approval relative to the integration plan. Korean Air plans to carefully review the mileage conversion rates and related services through a consulting firm.
The integration of three low-cost carriers (LCCs), including Korean Air's subsidiary Jin Air, Air Busan, and Air Seoul, into Jin Air will also proceed. It is highly likely that appointments of Korean Air personnel will be made to manage this. Internally, there are high expectations that the personnel bottleneck accumulated within Korean Air will be resolved as a result of this corporate merger. A Korean Air official noted, “The schedule for the board meeting regarding the appointment of each airline's representative director and executives has not yet been determined.”