Japan's loss could be a transhipment gain for Busan Port
South Korea’s main container port, Busan, is looking to Japan to bolster its status as ...
By Martina Li
South Korea’s second-largest airline, Asiana Airlines, today said agreed to sell its cargo business and pave the way to a merger with its larger compatriot, Korean Air Lines (KAL).
After a board meeting on Monday failed to reach a resolution, directors met again today, and three of the five board members voted for the sale of the cargo business, one was against and another abstained.
The carrier has a cargo fleet of 11 B747Fs, three of which are leased, and a 767 freighter.
Asiana found itself heavily in debt after Covid-19 battered air travel, prompting its largest creditor, state-owned Korea Development Bank, to inject KRW3.6trn ($2.7bn) of public funds to keep the airline afloat.
The government then began pushing for KAL to take over Asiana. KDB said this would give South Korea a single, competitive national airline amid industry-wide consolidation.
However, European Commission regulators feared such a merger would threaten competition on air freight and passenger services to and from Europe.
Asiana’s decision today means another South Korean airline will be sought to take over its air cargo business, while others could take over KAL’s Seoul to Paris, Frankfurt, Rome and Barcelona routes.
A KAL representative told The Loadstar: “Following the decision of Asiana’s board of directors, Korean Air has submitted the remedies to the European Commission, and we expect this to facilitate the remaining process.
“While Korean Air continues its efforts to secure the approval from the EC, the airline will also communicate closely with the remaining regulatory bodies to finalise the approval process as quickly as possible.”
KAL hopes to get EC approval by the end of January, while similar green lights are needed from from antitrust regulators in the US and Japan.
Unions representing Asiana staff had opposed the divestment of the cargo business, fearing job losses, but KAL has pledged to make job retention one of the terms of sale.
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