Korean Air and Asiana Airlines merger delayed by two years
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It’s going to be a few more years until Korean Air lands on the world’s largest airlines list.
The carrier’s merger with Asiana Airlines just hit a snag during a regulatory review process. Now, the updated timeline proposes an acquisition in 2022 and a full merger by 2024, as first reported by The Korean Times. The original plan was for the takeover to be completed by next year.
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The holdup is reportedly due to getting antitrust approval from countries served by Korean. In a statement to TPG, Korean mentioned that it’s pleased with the merger progress thus far and will continue to readjust the timeline as needed.
Korean Air has no outstanding issues with the acquisition and, so far, the integration is going as we expected. The post merger plan has been submitted to the Korea Development Bank (KDB), and we secured enough liquidity to finalize the acquisition through raising the necessary capital.
The acquisition can be finalized upon the merger approval from relevant countries, and we readjusted our timeline just in case some countries require more time to review and approve. The business integration plan involves every aspect of our operation and 2024 is what we are estimating finalize all aspects of the deal.
We assume the plan will be revised after KDB’s review, and we will keep you posted.
In November 2020, Korean announced that it would acquire a nearly 64% stake in Asiana Airlines for 1.8 trillion won (£1.2 billion), South Korea’s second-largest airline. When complete, the two carriers will combine to become the seventh-largest airline in the world.
Effectively eliminating a competitor isn’t usually good news for travellers, especially in the case of Korean and Asiana, which both belong to two separate airline alliances.
If the deal goes through, it’s widely expected that Asiana will leave the Star Alliance and move to SkyTeam, of which Korean was a founding member.
That means those looking to score sweet-spot redemptions with Star Alliance partner loyalty programmes, like Air Canada Aeroplan and United MileagePlus will need to make those bookings before the takeover is complete.
With international travel still largely off-limits, the delayed merger will buy some more time for savvy travellers to make those redemptions.
Featured photo by JUNG YEON-JE/AFP via Getty Images
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