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Air Incheon Emerges as Preferred Bidder for Asiana Airlines’ Cargo Business

 |  June 17, 2024

In a significant development within South Korea’s aviation sector, budget carrier Air Incheon has emerged as the frontrunner to acquire Asiana Airlines’ lucrative cargo operations. This move, confirmed by Korean Air on Monday, marks a pivotal step towards gaining final approval from the European Union competition regulator for Korean Air’s merger with Asiana Airlines.

Korean Air, the largest airline in South Korea, has been navigating regulatory hurdles since announcing its intent to acquire nearly two-thirds of Asiana Airlines for approximately $1.4 billion. However, the EU competition authorities mandated that Asiana’s cargo business must be divested before granting full approval for the merger.

In a regulatory filing, Korean Air disclosed that Air Incheon has secured priority in negotiations until July 15. This designation positions Air Incheon as the preferred bidder for Asiana’s cargo unit, encompassing its fleet of freighter aircraft, airport slots, workforce and operational contracts, as specified by the EU requirements.

Read more: EU Sets February Deadline for Korean Air, Asiana Deal

Asiana Airlines currently operates a fleet of 11 cargo aircraft, including Boeing 767s and Boeing 747s, serving 21 routes across 25 cities spanning 12 countries. These destinations include key markets such as the United States, Germany, Italy, Belgium and Britain, underscoring the strategic value of Asiana’s cargo business in global logistics networks.

Korean Air’s acquisition strategy has already received clearance from competition authorities in 13 out of 14 jurisdictions worldwide, highlighting significant progress towards finalizing the merger deal. The airline remains optimistic about obtaining approval from U.S. regulators by the year’s end, according to CEO Walter Cho.

The proposed acquisition by Air Incheon not only consolidates its position within the South Korean aviation market but also sets the stage for enhanced operational synergies and expanded market reach post-merger. As stakeholders await further developments, the outcome of negotiations between Air Incheon and Asiana’s cargo division will undoubtedly shape the future landscape of air cargo services in the region.

Source: Channel News Asia