SEOUL, Sept. 13 (Yonhap) — Korean Air Lines Co.’s acquisition of Asiana Airlines Inc. is inevitable to keep the Korean aviation industry afloat in the pandemic era and promptly needs final approval, the head of Korea Development Bank (KDB), Asiana’s main creditor, said Monday.
Lee Dong-gull, the chairman of the state-run bank, made the remark while Korean Air is waiting for regulatory approval of its 1.8 trillion won (US$1.6 billion) acquisition of debt-ridden Asiana.
“Integration of Korean Air and Asiana Airlines is inevitable and essential to help the Korean airline industry survive and enhance competitiveness in the global market,” Lee said in an online press briefing. “I hope the (local authority) will approve the deal as soon as possible.”
Korean Air has received approvals from regulators in Thailand, Taiwan and Turkey, and still needs nods from six other countries, including South Korea, the United States, China, Japan, Turkey and Vietnam, as well as the European Union.
Korean Air, currently the world’s 18th largest airline by fleet, will become Asiana’s biggest shareholder with a 63.9 percent stake if the acquisition is completed.
The nation’s two full-service carriers account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea’s main gateway, below the level that constitutes a monopoly.
Korean Air said it aims to launch a merged entity with Asiana in 2024 after completing a takeover process by next year, vowing to streamline their routes and reduce maintenance costs.
The two airlines have suspended most of their flights on international routes since March 2020 as countries have strengthened their entry restrictions to stem the spread of the COVID-19 pandemic.