Korean Air Lines spells out plan to absorb Asiana
Korean Air Lines reached agreement with the Korea Development Bank (KDB) on how it will integrate Asiana Airlines into its operations.
The airline on Wednesday said that it received confirmation from the state-run bank on its plans after it acquires its smaller rival.
Korean Air Lines initially submitted the post-merger integration plan to the KDB in March after conducting due diligence. It had to make revisions, which were approved by the bank on Tuesday.
Specific details of the plan were not announced, but the plan should spell out how employment levels and how the two airlines will integrate their budget carriers and other subsidiaries.
Jin Air is 56.38 percent owned by Hanjin KAL, which also has 27.66 percent of the shares of Korean Air Lines. Budget carriers Air Busan and Air Seoul are subsidiaries of Asiana Airlines.
The plan also includes a promise not to raise ticket prices, according to local media reports.
“The newly integrated global airline will increase operational efficiency of overlapping passenger and cargo routes, while diversifying its schedules and expanding opportunities for new routes, which will increase customer benefits and create integrated synergy by reducing costs,” said Korean Air Lines in a statement.
The airline is still waiting to win business combination approvals from the Fair Trade Commission and corresponding authorities abroad.
It has so far been given the green light from authorities in Thailand, Turkey, Taiwan and the Philippines. It is waiting for approvals from the United States, China and Japan.
Korean Air Lines announced it would acquire the debt-laden Asiana Airlines last November.
It plans to merge the airlines to create a mega-carrier in 2024.
Asiana Airlines on Wednesday reported in a regulatory filing that it was issuing 131,578,947 shares of common stock.
The shares will be allotted to Korean Air Lines.
The new shares are scheduled to be listed on October 25.
BY JIN MIN-JI [email@example.com]