Korean Air (003490.KS) will complete its acquisition of Asiana Airlines (020560.KS) on December 17, taking its first step as an integrated carrier and reemerging as a global top-tier airline. The combined Korean Air plans to strengthen its competitiveness in the aviation market by pursuing merger approval procedures with domestic and overseas aviation authorities while reinforcing safe flight operations.
Korean Air and Asiana Airlines said Thursday that their respective regular board meetings had approved the signing of the merger contract. The two companies will sign the merger contract Friday. Korean Air and Asiana Airlines will launch as the "integrated Korean Air" on December 17.
Under the merger contract, Korean Air will take over all of Asiana Airlines' assets, liabilities, rights, obligations and employees. The merger ratio was set at 1 (Korean Air) to 0.2736432 (Asiana Airlines) based on closing prices on Wednesday, the trading day immediately before the board meetings.
Following the signing of the merger contract, Korean Air will proceed with all procedures necessary for the stable integration of the airlines' safety operation systems. Immediately after signing the contract Friday, the company will file for merger approval with the Ministry of Land, Infrastructure and Transport (MOLIT).
In June, Korean Air will apply for approval of changes to its operating standards, which contain compliance conditions and restrictions related to aviation safety that will be altered by the integration. After domestic licensing procedures are completed, the company will sequentially proceed with necessary procedures, including operating standards changes, with overseas aviation authorities.
Asiana Airlines will hold an extraordinary shareholders meeting in August to resolve the merger agenda. As the deal meets the requirements for a small-scale merger, Korean Air will hold a board meeting on the same day as the shareholders meeting to vote on the agenda.
After completing the restructuring of the aviation industry, Korean Air plans to use the launch of the integrated carrier as a springboard to strengthen its competitiveness in the global aviation market and establish a foundation for sustainable growth.
Ahead of the launch of the integrated carrier, Korean Air has already invested in safe flight operations and improved customer service, the foundations for competing with global mega carriers. In particular, the company has expanded customer options through the reallocation of overlapping routes and the development of new routes, while significantly enhancing tangible service quality through airport lounge renovations, revamped in-flight meals and airport terminal relocations.
