Korean Air Lines said on the 19th that based on annual synergies of more than 300 billion won after its merger with Asiana Airlines, it expects to offset integration expense of about 900 billion won to 1 trillion won starting at the end of 2028.
Korean Air Lines stated accordingly at a shareholder meeting held that afternoon at the headquarters of Korea Investment & Securities Co. in Yeouido, Yeongdeungpo District, Seoul. The meeting was attended by Vice Chairman Woo Kee-Hong of Korean Air Lines, Executive Vice President for the institutional sector Ha Eun-yong, and Managing Director for the Corporate Strategy Division Choi Young-ho, among other key executives.
Korean Air Lines did not disclose specific profitability targets such as operating profit after the merger that day, but it expected an annual integration synergy effect of about 300 billion won. It plans to optimize the networks of Korean Air Lines and Asiana to boost synergies in both passenger and cargo businesses.
In the passenger institutional sector, the two companies will spread out overlapping-time flights. In the cargo institutional sector, cargo volume from Asiana Airlines' passenger aircraft will be linked to Korean Air Lines' global network. In the maintenance institutional sector, Korean Air Lines will directly handle volumes that had relied on overseas providers, reducing expense as well.
Executive Vice President Park Hee-don, head of the Corporate Strategy Division at Korean Air Lines, said, "Estimated integration expense is about 900 billion won to 1 trillion won," adding, "Synergies are about 300 billion won annually." Park continued, "We are currently analyzing strategically how to raise margins, and it may exceed market analyses," and explained, "From the end of 2028 or early 2029, we will offset the expense投入 for integration."
Based on this, Korean Air Lines envisions growing into a global airline with annual revenue of 23 trillion won. Once the two companies complete their integration, Korean Air Lines will have a fleet of about 230 aircraft and a route network serving about 120 cities.
Vice Chairman Woo said of the merger, "There were hurdles as we went through rigorous reviews by overseas competition authorities, but we have successfully reached the final stage of integration," adding, "This unprecedented integration between flag carriers will go beyond the physical combination of two airlines to reshape the aviation industry and build a competitive aviation ecosystem."
Korean Air Lines plans to obtain merger approval from the Ministry of Land, Infrastructure and Transport (MOLIT) by the end of June, then proceed with approval of the securities registration statement by the Financial Supervisory Service and Asiana Airlines' shareholders' meeting in Aug. The merger ratio is 0.2736432 share of Asiana Airlines per 1 share of Korean Air Lines. A shareholder holding 1 common share of Asiana Airlines will receive about 0.27 new share of Korean Air Lines.