Hanjin KAL Sells All Jin Air Shares to Korean Air... "Preparing for LCC Integration"

[Asia Economy Reporter Yoo Hyun-seok] Hanjin KAL announced on the 13th that it held a board meeting and resolved to sell all Jin Air shares held by Hanjin KAL to its subsidiary Korean Air.

The shares subject to sale are 28,665,046 Jin Air shares held by Hanjin KAL, accounting for 54.91% of the stake. The total sale amount is approximately 604.8 billion KRW.

Hanjin KAL has continuously supported its subsidiaries, which have been struggling due to the impact of COVID-19, including participating in capital increases. As a result, borrowings have significantly increased to over 1 trillion KRW since 2020 to secure funds, weakening the financial structure. However, the proceeds from this sale are planned to be used to repay borrowings maturing this year. The financial structure is expected to improve.

Additionally, through the restructuring of the group’s governance by vertically integrating Hanjin Group’s airline affiliates, it aims to optimize the airline route network by ▲streamlining overlapping routes ▲strengthening connecting flights. Along with this, by maximizing synergies in airline transportation-related businesses such as aircraft introduction and operational efficiency, it will enhance the corporate value of affiliates and improve benefits for airline consumers.

Moreover, in preparation for the post-COVID era, low-cost carriers (LCCs) are expanding capital and securing liquidity through capital increases. Jin Air, Hanjin Group’s low-cost carrier, has also been incorporated as a subsidiary of Korean Air, creating an environment that can flexibly respond to rapidly changing air passenger demand.

Hanjin KAL expects that this governance restructuring will serve as a stepping stone for the ongoing integration of Korean Air and Asiana Airlines into a full-service carrier (FSC) and the launch of an integrated LCC including Jin Air.

Meanwhile, this sale of Jin Air shares from Hanjin KAL to Korean Air is a transfer of shares within the same Hanjin Group affiliate group. It does not affect the ongoing overseas merger filing related to Korean Air’s acquisition and integration of Asiana Airlines.

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