Korean Air to Sell In-flight Meal and Duty-Free Businesses

Sale Estimated at About 1 Trillion Won... PEF Han & Company Strongly Mentioned

Due to the impact of COVID-19, the in-flight meal preparation area inside Korean Air's catering center was quiet on the 2nd as the airline industry suffers significant losses. Photo by Moon Honam munonam@

[Asia Economy Reporter Yoo Je-hoon] Korean Air is set to sell its in-flight meal and in-flight sales divisions to overcome the financial difficulties caused by the COVID-19 pandemic.

According to the aviation industry on the 6th, Korean Air will hold a board meeting on the 7th. Industry insiders expect that the sale of the in-flight meal and in-flight sales divisions will be reported at the Korean Air board meeting.

Earlier, as 90% of international routes were suspended due to the COVID-19 pandemic, Korean Air conducted business restructuring and division valuation with Credit Suisse (CS) and others. This evaluation considered the sale measures to secure liquidity.

The in-flight meal and in-flight sales (duty-free) divisions are known as the "golden goose" business units. Industry experts believe that compared to core divisions such as aircraft maintenance (MRO) or mileage business, these divisions can be monetized relatively quickly.

An industry official said, "The MRO and mileage divisions are difficult to separate from airline operations," adding, "The in-flight meal division has a net profit margin in the 20% range, and with the recovery from the COVID-19 crisis, it can generate stable cash flow, making its sale highly likely."

Private equity firm Hahn & Company is being strongly mentioned as a potential buyer. It is reported that Korean Air has contacted prominent PEFs, including Hahn & Company, regarding the sale of the in-flight meal and in-flight sales divisions.

This content was produced with the assistance of AI translation services.