Unions have put yet another obstacle in the path of Korean Air’s delayed acquisition of Asiana Airlines by objecting to both the nature of the takeover and the choice of Air Incheon as the preferred bidder for the sale of Asiana Airlines’ cargo business.
There was some positive progress with Korean’s acquisition of fellow Korea-based Asiana earlier this month when Korean cargo airline Air Incheon was named as the preferred bidder for the sale of Asiana’s cargo business, which has been actioned in order for Korean Air to secure approval for the acquisition.
However, an Asiana Pilot Union Facebook post today stated that it, alongside the Asiana Airlines Labour union, had doubts about Air Incheon’s ability to take on Asiana’s cargo business, describing it as too small to handle the business.
“Air Incheon, ‘a shrimp trying to swallow whale’ is uncertain about its permanence, which is likely to result in Korean Air’s monopoly in the air cargo business,” said the unions.
The unions further said they would oppose Hanjin Group-owned Korean Air’s acquisition of Asiana on the grounds that it “will cause national damage”.
“As it is clear that Korean Air’s merger and acquisition of Asiana Airlines will cause national damage, the Asiana Airlines pilots’ union and the Asiana Airlines union declare their determination to oppose it,” said the unions. Both unions now “demand that a third-party acquisition company be found”.
The unions added that rather than the acquisition being a sound business move “the merger and acquisition process so far clearly shows that the mega-carrier has become a false sign and has been reduced only to a means of defending Hanjin Group Chairman Cho Won-tae’s managerial control, raising fears of enormous national and national losses”.
The unions object to Korean Air’s return of air traffic rights during the acquisition process, which they said has led to a large amount of annual aviation sales being transferred from national airlines to foreign airlines.
Korean Air has also been accused of cancelling flights to reduce the number of flights on major European routes to meet the EU’s acquisition requirements, while the unions additionally raised concerns about potential job losses and increased ticket prices for passengers.
Korean Air first announced its plan to acquire Asiana Airlines in November 2020, but the acquisition proceedings were delayed by the Covid pandemic and resulting disruption in the airline industry.
Then last year, the plan sparked concern from the European Commission, which said the takeover would result in reduced competition between Europe and South Korea because the two carriers dominate the long-haul market to and from South Korea. Korean also struggled to gain approval for the deal in Japan and the US.
To secure regulatory approval from Brussels for the move, Korean offered to sell Asiana Airlines’ cargo business in October 2023.
In December, European Union competition regulators set a February 2024 deadline to review Korean Air’s proposed acquisition of Asiana Airlines after the two airlines resubmitted their plans to EU antitrust regulators.
Korean Air said in January that it expects to complete the acquisition of Asiana Airlines this year.