Korean Air will sell its in-flight duty-free and catering subsidiary to Hahn & Company, a private equity investment company in South Korea, and is expected to receive 1 trillion KRW ( 836 million USD) according to the Korean Economic Daily.
At present, the two companies are in final negotiation on the terms of the deal. Korean Air will report the agreement to the board of directors for approval on July 7.
Also, Hahn & Company is considering the acquisition of the airline’s aviation training center located in Yeongjong Island for an undisclosed sum. It is anticipated that it will help Korean Air ease its liquidity problems caused by the global pandemic.
Since April, Korean Air has considered selling MRO, mileage programs and other businesses. And according to Moodie Davitt, Korean Air has been operating the world’s most successful in-flight duty-free business.
In 2019, duty-free business sales of Korean Air reached nearly 135 million US dollars, a year-on-year decrease of 5.6%. However, the depreciation of the South Korean won compared with the US dollar means that the duty-free sales remained the same. The global pandemic this year has severely impacted the airline. Nevertheless, with the high consumption passenger structure of Korean Airlines and its strong airline network to China, its business is expected to rebound by time.