"Korean Air, Asiana Integration to Generate Up to 400 Billion KRW Annual Synergy Effect"

Woo Ki-hong CEO Online Press Conference
"No Artificial Workforce Restructuring"

Woo Ki-hong, President of Korean Air, is holding an online press conference on the 31st regarding the acquisition and integration plan (PMI) of Korean Air and Asiana Airlines.

[Asia Economy Reporter Dongwoo Lee] Korean Air expects to generate synergy effects worth up to 400 billion KRW annually through its integration with Asiana Airlines. Korean Air once again emphasized that there will be no artificial workforce restructuring after the merger of the two companies.

On the morning of the 31st, Korean Air President Woo Ki-hong said at an online press conference, "If the integration fully recovers from the impact of COVID-19, the synergy effect is expected to be around 300 to 400 billion KRW annually after about two years," adding, "We will enhance profitability through route rationalization, strengthening connecting flights, and increasing JV effects."

He continued, "Once all corporate merger filings are completed, Asiana Airlines will be incorporated as a subsidiary of Korean Air," adding, "In this case, the structure will be Hanjin KAL → Korean Air → Asiana Airlines, and after about two years of integration preparation, Korean Air plans to merge Asiana Airlines."

Regarding overlapping routes between the two companies, he explained, "If flight schedules are reorganized after the integration, based on our review, the number of aircraft required to provide the same supply as now can be reduced by about 10%, improving efficiency," adding, "We can also use the available aircraft to launch new destinations beyond existing routes."

Regarding concerns about market monopoly, President Woo emphasized, "Currently, the slot occupancy rate of Korean Air and Asiana Airlines at Incheon Airport is below 40%," adding, "This is lower compared to the slot occupancy rates of other global airlines at their hub airports in Asia, Europe, and the United States, so there will be no monopoly concerns due to the integration."

For low-cost carriers (LCCs), plans are being considered to integrate Jin Air, Air Busan, and Air Seoul into a single airline. President Woo said, "We are considering two options: placing the integrated LCC under Korean Air or, similar to Jin Air currently, under Hanjin KAL," adding, "However, the decision will be made after careful review of all factors including required funds, preparation status, and restrictions under the Fair Trade Act, and the timing and method will be determined accordingly."

Furthermore, regarding concerns about fare increases after the integration, he clearly stated that there will be no artificial price hikes by abusing market position. President Woo also emphasized once again, "We have promised not to conduct artificial workforce restructuring," explaining, "Considering the annual retirements and natural attrition in both companies, it is at a level that does not pose a problem."

Meanwhile, President Woo said about mileage after the integration, "When the appropriate time comes, we plan to thoroughly analyze Asiana Airlines' mileage status and determine a reasonable conversion rate compared to Korean Air's mileage, and we will also review plans to integrate the frequent flyer programs of both companies."

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