Air Incheon to Acquire Asiana Airlines’ Cargo Unit for $342 Million

Asiana Airlines’ cargo unit will be sold to South Korean cargo carrier Air Incheon for 470 billion won ($342 million), Korean Air Lines announced on Wednesday. According to Reuters, the transaction comes as part of a strategic move required by the European Union’s competition regulator for the approval of Asiana’s merger with Korean Air.

In June, the EU competition authority approved Air Incheon as the preferred bidder to acquire Asiana’s cargo business. This decision is a critical condition for the merger between Asiana and Korean Air, which is set to make Korean Air the primary player in the South Korean aviation market.

Read more: Korean Air Wins EU Approval for Asiana Airlines Takeover

The sale, formalized in an agreement signed on Wednesday, will see Air Incheon, a specialized cargo-only airline, become South Korea’s second-largest freight carrier. Per Reuters, the acquisition will transfer Asiana’s fleet, staff, customers and traffic rights to Air Incheon. The airline is headquartered at Incheon Airport, South Korea’s main international hub and the world’s fifth-busiest cargo airport.

Korean Air, currently South Korea’s largest carrier, plans to acquire nearly two-thirds of Asiana Airlines for approximately $1.4 billion. However, antitrust authorities in the European Union mandated the divestiture of Asiana’s cargo operations before granting complete approval for the merger. So far, Korean Air has secured approval from 13 out of 14 competition authorities for the merger. CEO Walter Cho has expressed optimism about receiving the final nod from U.S. regulators by the end of October.

Source: Reuters