Air Incheon Co., South Korea’s cargo airline, has been reportedly selected as the preferred bidder to acquire the cargo division of full-fledged carrier Asiana Airlines Inc., according to industry sources Friday.
The cargo-only airline outbid three competitors — Jeju Air Co., Eastar Jet Co. and Air Premia Inc. — in a bidding process, which started earlier this year.
Korean Air Lines Co., South Korea’s flagship air carrier, which is pursuing a merger with Asiana Airlines, will hold a board meeting next Monday to approve the sale plan of Asiana’s freight unit, the sources said.
Korean Air plans to complete the sale process by the end of this year.
The sale of Asiana Airlines’ cargo division is part of conditions recently set by the European Union due to competition concerns related to the merger.
Korean Air has secured approval from 13 countries and regions, including the EU, and is waiting for final approval from the United States.
Asiana Airlines’ cargo business unit is known to generate revenue of o
ver 1 trillion won (US$749.4 million) annually. The cargo division deal is expected to be concluded at around 500 billion won.
Many of Asiana Airlines’ cargo aircraft are known to be over 30 years old, leading to speculation that the acquiring company will need to invest significantly in large-scale maintenance costs.
Air Incheon is the seventh-largest cargo airline among South Korean air carriers, handling 39,000 tons of freight last year with its fleet of 11 cargo aircraft. It posted 70.7 billion won in revenue in 2023.
Source: Yonhap News Agency