[2023 National Audit] Kang Seok-hoon: "Asiana Board Will Make Rational Decision on Cargo Sale"

Kang Seok-hoon, Chairman of KDB Industrial Bank, said on the 24th regarding Asiana Airlines' plan to separate and sell its cargo business division for integration with Korean Air, "I believe the Asiana Airlines board of directors will also make a reasonable decision."

[Image source=Yonhap News]

Chairman Kang made this remark during the morning session of the National Assembly's Political Affairs Committee audit held in Yeouido, Seoul, responding to the ruling of Rep. Kang Min-guk of the People Power Party, who pointed out that the atmosphere within the Asiana Airlines board regarding the agenda to separate and sell the air cargo division, to be discussed on the 30th, was unusual.

Currently, the merger between Korean Air and Asiana Airlines has not progressed due to delays in reviews by competition authorities in three countries: the United States, the European Union (EU), and Japan. Among these, the EU has requested that Asiana Airlines include in its remedial measures the return of slots (SLOT: the number of takeoffs and landings per hour) and the separation and sale of its air cargo business division by the end of this month.

Regarding this, Chairman Kang said, "Among the three countries where the review is ongoing, the EU's opinion is quite important. Other countries have recently been aligning with the EU competition authorities," adding, "In past airline mergers, the deal was usually completed by returning slots, but nowadays, stronger conditions are being demanded."

Rep. Kang also pointed out, "Within the Asiana Airlines board, there is a widespread sentiment of 'Even if the air cargo separation and sale plan is rejected and the merger fails, surely public fund support will not be stopped ahead of next year's general election,'" and warned, "In this case, Asiana Airlines is highly likely to fall into a vicious cycle of repeated public fund injections, similar to the former Ssangyong Motor (now KGM)."

Chairman Kang responded, "If Korean Air and Asiana Airlines do not merge, the possibility of recovering the invested public funds is very low," emphasizing, "If a decision is made after the merger fails to save Asiana Airlines, it will be an unknown situation how much more public money and taxpayers' funds will be required."

He also stated, "If the two companies successfully merge, the possibility of recovering the invested public funds of 3.6 trillion won will greatly increase," and explained, "If the merger is successful, the acquisition funds paid by Korean Air can be recovered in the form of perpetual bonds, and the rest can also be recovered as the integrated airline operates."

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