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Korean Air’s Asiana takeover back on track: Korean Air is expecting to complete its USD 1.8 tn drawn-out purchase of indebted South Korean rival Asiana Airlines next week, Reuters reports. The plan — originally announced four years ago to rescue Asiana — was hampered by competition concerns — would see Asiana run as a subsidiary for up to two years before integrating into one airline and will create a single low-cost carrier by blending Asiana’s budget carriers Air Busan and Air Seoul with Korean Air’s Jin Air.
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Good news for Asiana, not so great for Korean Air: The merge provides Asiana with the protection of a well-capitalized partner after facing difficulties in recent years that stemmed from a weak competitive position and operation efficiencies, while Korean Air — which will inherit Asiana’s significant debt burden — could see a strain on its healthy credit healthy profile, Siddharth Narkhede added.
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