The President of Korean Air reassured employees of the airline that after an ongoing takeover of Asiana Airlines, which is planned to be finalized by the second half of 2021, the major part of the staff at both airlines would save their jobs as Korean Air had no plans for redundancies.
Speaking in a press conference on December 2, 2020, Woo Kee-Hong, the President of Korean Air, explained that as some of 28,000 employees work at both South Korea’s national airlines at the same time, the acquisition of Asiana Airlines would become an opportunity to diversify and expand routes of the merged companies.
Besides, the Head of the air carrier revealed that the company expected to create a separate “mega international low-cost carrier”, which would be run by separate administrators and a corporation. The new low-cost air carrier would combine three existing South Korean budget air carriers, including Air Seoul, Jin Air, and Air Busan, and could become a similar synergy in terms of profit and flight schedules as the new Korean Air’s and Asiana’s deal. According to local media, if the plan is implemented successfully, that could make Korean Air the 15th largest airline in the world.
On December 1, 2020, Korean Air received the Seoul court’s approval allowing further actions in a stock issuance to complete the planned purchase of indebted Asiana Airlines. Back in November 2020, Korean Air announced its bid to become the biggest shareholder of Asiana Airlines in cooperation with the Korea Development Bank taking over 63.9 % of Asiana’s stake.
The plan to sell Asiana Airlines initially arose in April 2019, when the airline suffered a financial crisis. At the time, Kumho Asiana Group, the parent company of the airline, decided to dispose of its controlling stake by selling almost 34% to avert Asiana’s liquidity crisis.
The most recent attempt to buy the airline was made by the HDC Hyundai Development Company in July 2020. However, the takeover failed and the KDB announced that the airline would be running by the creditor’s management system in September 2020.