Air merger of the year. Korean Air will engulf Asia, creating the tenth largest carrier

The merger will create a carrier with 250 aircraft, with control with the support of the Korean State Bank.

South Korea will see the largest announced merger in aviation so far this year. It will lead to the creation of a carrier heading to the list of the ten largest airlines in the world.

Korean Air will absorb its long-term rival, Asiana Airlines. The new carrier will thus gain a significantly dominant share of the South Korean market. The transaction was announced by the owner of Korean Air Hanjin KAL v press release a few hours after the merger negotiations began to leak into the market.

Korean Air is investing a total of 1.8 trillion won (approximately 36 billion crowns) in Asian. They call the move the stabilization of Korean aviation. “It is inevitable to restructure the domestic aviation market in order to minimize state spending on rescuing it, “Korean said in a statement.

Korean Air will become the largest shareholder of Asiana Airlines through the issuance of new shares, while buying part of the bonds. At the same time, the State Development Bank (KDB) will increase the capital of the owner, Korean Air. In essence, Korean Air gets a lot of money to swallow its biggest competitor.

Asiana, which has been struggling for several years, belongs to the Korean industrial group Kumho Industrial. The merger of the two carriers will create a company that will reach the top ten largest airlines in the world in terms of the number of passengers. Asiana has 82 aircraft in the fleet, Korean Air 170.

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