Korean Air and Asiana Airlines will merge on December 17.
The merger was formally approved at the boards of directors of both companies held on May 13. The two airlines will sign a merger agreement on May 14 and submit an application for approval to the Ministry of Land, Infrastructure and Transport of South Korea. After that, they will proceed with the necessary procedures with the relevant authorities in each country.
Korean Air will be the surviving entity, and the share exchange ratio, based on the reference market price, will be 1:0.2736432. Following the integration, Korean Air’s capital is expected to increase by approximately 101.7 billion Korean won.
The merger is expected to reduce fixed costs and achieve economies of scale through the integration of operational infrastructure such as ground handling and in-flight catering, and to cut overlapping administrative expenses by consolidating overseas branches and sales networks. By centrally managing the liquidity that is currently dispersed between the two companies, they aim to improve capital efficiency, optimize investment in new aircraft, and enhance financial leverage.
