Korean Air and KDB Finalize Integration Plan for Asiana Airlines

[Asia Economy Reporter Dongwoo Lee] Korean Air announced on the 30th that it has finalized the Post-Merger Integration (PMI) plan after acquiring Asiana Airlines under the confirmation of the Korea Development Bank.

The finalized PMI plan includes integration measures for the major airlines Korean Air and Asiana Airlines, as well as affiliated low-cost carriers (LCCs) Jin Air, Air Busan, and Air Seoul; solutions to address restrictions on holding companies under the Fair Trade Act; employment retention and succession of collective agreements; and efficiency improvements in support business sectors.

With the PMI plan finalized, Korean Air plans to proceed with the integration process with Asiana Airlines step-by-step after obtaining approval from relevant competition authorities for the corporate merger. However, since the measures included in the PMI plan are closely related to risk factors in market conditions, legal, financial, and tax areas, it is expected that the final implementation plan will comprehensively reflect these market and regulatory environment factors.

Meanwhile, Korean Air expects that the newly launched global network airline, formed through the integration with Asiana Airlines based on the PMI plan, will achieve efficiencies by streamlining overlapping passenger and cargo routes, diversifying passenger and cargo schedules by strengthening connecting flights, enhancing customer benefits through expanded opportunities for new route selection, and creating integration synergies through cost reductions.

Furthermore, the integrated global network airline, together with the integrated low-cost carriers, is anticipated to realize economies of scale, improving efficiency across related industries, while providing an opportunity for partner companies and related enterprises to grow together as companions in the future aviation industry.

Previously, in November last year, Korean Air signed a contract to acquire new shares and perpetual convertible bonds of Asiana Airlines and conducted due diligence on Asiana Airlines and its subsidiaries. After completing due diligence, Korean Air submitted the PMI plan, which includes the integration strategy of both airlines post-acquisition, to the Korea Development Bank on March 17.

The Korea Development Bank reviewed the PMI plan submitted by Korean Air over approximately three months and finalized the plan after multiple consultations with Korean Air, the Korea Development Bank, the Ministry of Land, Infrastructure and Transport, and other related government agencies.

Korean Air stated, "We will proactively prepare necessary measures to faithfully implement the PMI plan going forward, and in accordance with the agreement with the Korea Development Bank, we will undergo periodic evaluations by the Management Evaluation Committee established under the agreement to ensure faithful execution of the PMI plan."

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