By Arturo Higueras
Korean Air Merger with Asiana Delayed until 2024
The acquisition of Asiana by Korean Air will not be completed by 2022 as was predicted. The main airline of South Korea has delayed the operation until 2024 due to several obstacles the monopoly law and the future operations of low-cost airlines Jin Air, Air Busan and Air Seoul.
With this operation, the resulting carrier will be the seventh airline in the world. According to the South Korean government, Korean Air presented an integration plan where Asiana would be acquired in 2022 and the complete merger will be finished in 2024. The acquisition is supposed to be completed by June 2022 with the injection of 1.5 billions wones (roughly $1.3 million) to control 63.7% of Asiana.
The delay in the merger is a result of the obstacles set by eight different countries where the resulting carrier will be operating. Only Turkey has given its approval, while South Korea, the United States, China, Japan, Vietnam, Taiwan and Thailand monopoly authorities are still studying the case. The merger requires at least four approvals, excluding the home base country, to be completed. Many international carriers are reluctant of the purchase, as the new carrier will become the 7th larger airline in the world, increasing competition in an already-congested market.
The United States and South Korea have an Open Skies agreement that allows airlines from both countries to choose the frequency, routes and the aircraft type of operated. However, there will be necessary changes as Asiana is a member of the Star Alliance. It operates the connection between Seoul Incheon Airport and San Francisco airport jointly with United Airlines. As alliance partners, they also have codeshare agreements in routes to New York, Los Angeles and Seattle. Once the merger is approved, the resulting carrier will only be a member of the SkyTeam alliance, which Korean Air is currently part of, preventing the association with United.
A week ago, Korean Air became the last airline to adopt the IATA Travel Pass in its route between Seoul Incheon and Seattle. It will be used starting in April and will allow passengers to show their COVID-19 test results and, soon, a vaccination certificate.
“We believe the digital travel pass will improve the customer experience for passengers as they can share health information in a convenient and secure manner, and save processing time at the airports. Korean Air will continue its efforts to provide a safe and seamless travel experience through initiatives such as the travel pass,” said Korean Air Chief Customer Service Officer Seungbum Lee. South Korea’s vaccination program is especially slow, as it has only vaccinated 1.6% of its population, according to the University of Oxford.
Arturo joined AirlineGeeks in 2020 as a writer. He is a Spanish Aerospace Engineer who recently completed his undergraduate studies at the Polytechnic University of Madrid. He has always been passionate about aviation and, in addition to his engineering knowledge, he is now completing a Master’s Degree in Air Transport Management at Cranfield University in the United Kingdom. Being passionate about journalism, he has been part of several online magazine projects, he will now be covering aviation news from Europe.