Daemyung Sono Group has taken a significant step toward securing management rights for T'way Air. Industry insiders believe that Chairman Seo Jun-hyuk of Daemyung Sono Group is actively pursuing the idea of establishing a comprehensive travel platform that encompasses tourism, leisure, accommodation, and aviation.
According to a comprehensive report by ChosunBiz on the 18th, YeaRimDang and Daemyung Sono have concluded their conflict over management rights for T'way Air and entered dramatic negotiations. It has been confirmed that Daemyung Sono has withdrawn its requests for a temporary injunction to place the agenda on the regular shareholders' meeting and to inspect and copy the shareholders' register.
The largest shareholders of T'way Air are Tway Holdings and YeaRimDang, holding 30.14% of the equity, including related parties. Daemyung Sono Group is the second largest shareholder, having secured 26.77% of the equity. If Daemyung Sono acquires YeaRimDang's equity, it will secure a majority (56.83%) and gain management rights.
◇ Daemyung Sono's T'way signals impending disruption in the aviation industry
T'way Air is a leading low-cost carrier (LCC) in South Korea, currently enhancing its competitiveness by expanding overseas routes and introducing medium to large aircraft (A330).
Daemyung Sono Group is expected to stabilize its financial structure through additional investment after acquiring T'way Air, and in the medium to long term, it is likely to pursue premium aviation services and the expansion of global routes. There is a possibility that a new form of mid-sized airline could emerge.
Currently, the Korean aviation industry is showing a rapid recovery after COVID-19, but volatility is increasing due to industry restructuring and intensified competition. Nine LCCs, including Jeju Air, Jin Air, T'way Air, Air Busan, Air Seoul, Fly Gangwon, Aero K, Air Premia, and Eastar Jet, are currently operating in the domestic market.
In particular, if the merger between Korean Air and Asiana Airlines is completed, the likelihood of integration for Jin Air, Air Busan, and Air Seoul under their umbrella will increase, accelerating the restructuring of the LCC sector. In this situation, if Daemyung Sono acquires T'way Air, it is expected to exert influence in the aviation merger and acquisition (M&A) market.
Daemyung Sono is also considering the possibility of merging with Air Premia after completing the acquisition of T'way Air. Daemyung Sono acquired an 11% equity stake in Air Premia from JC Partners for 58.1 billion won last November. Additionally, it holds a call option to purchase another 11% after June. If it secures equity held by JC Partners and Tire Bank, it could potentially become the largest shareholder of Air Premia.
◇ Seo Jun-hyuk: "We will become a comprehensive tourism corporation responsible for the beginning and end of travel"
Chairman Seo Jun-hyuk of Daemyung Sono has long presented the vision of being a "comprehensive tourism corporation responsible for the beginning and end of travel." His goal is to organically connect T'way Air with the group's travel and leisure businesses to provide customers with a one-stop travel service.
Therefore, Chairman Seo's recent actions are assessed not as a simple acquisition of an airline, but as an important step toward growing Daemyung Sono Group into a comprehensive tourism corporation. Attention is focused on whether it can provide differentiated travel services to customers through the convergence of the aviation and accommodation/leisure industries.
Industry insiders are forecasting that a robust travel platform combining aviation with accommodation and leisure could emerge through the merger between Daemyung Sono and T'way. Daemyung Sono Group is the largest resort company in South Korea, known for brands such as 'Sol Beach' and 'Sono Bell.' The group offers comprehensive leisure services through various businesses, including resorts, hotels, leisure, real estate development, and aviation. Last year, it marked a turning point by being designated as a large enterprise disclosure group for the first time in its 45-year history.
In 2019, the company intensified its overseas expansion, realizing that growth through domestic markets alone was limited due to the aging population and existing demographic structures. It currently operates hotels in Vietnam, the United States, Hawaii, and New York. Daemyung Sono is able to expand direct flights to key hubs such as New York, Hawaii, and Hai Phong, Vietnam, and connect with accommodations through T'way Air's network.
This aims to transform into a global tourism corporation centered on South Korea. For example, by linking T'way Air's short-haul routes in Southeast Asia, Japan, and China with Daemyung Sono Group's national resort and hotel network, it could maximize the attraction of foreign tourists (inbound). Package offerings allowing travelers arriving via T'way Air to stay at Daemyung Sono resorts and enjoy customized services like golf, spa, and leisure will also be possible.
Conversely, by offering packages that combine T'way Air's affordable flight tickets with overseas resort accommodations operated by Daemyung Sono for domestic travelers (outbound), it will enable a one-stop travel service similar to the 'Korean Air-Hanjin Tourism' model.
A representative from Daemyung Sono Group noted, "Negotiations are currently in progress, but no confirmed details are available," while adding that it is reviewing various strategies, including the merger of T'way Air and Air Premia, along with connections to the resort business.