Summary
- Jeju Air said it did not submit a bid for Asiana Airlines Cargo assets.
- Korean Air was forced to commit to the sale of Asiana Airlines’ cargo subsidiary to gain approval of the merger from the European Commission (EC).
- Three bidders, including Air Premia, Eastar Jet, and Air Incheon, remain interested in acquiring the cargo assets.
Jeju Air, a South Korea-based low-cost carrier, officially announced that it will not continue the bidding process for Asiana Airlines Cargo assets, which includes aircraft and contracts with customers. According to local media reports, three parties remain in the running for the acquisition of the airline’s cargo resources.
Not submitting a bid
In an April 25, 2024, filing with the South Korean Data Analysis, Retrieval and Transfer System (DART), Jeju Air said that it had conducted due diligence on the cargo division of Asiana Airlines, but it did not submit a scheduled bid. However,
“Depending on the progress of the sale process, we will re-announce this information when details are confirmed or within one month.”
In a previous filing in early April, Jeju Air said that it was selected as one of the candidates to acquire Asiana Airlines Cargo and its assets, emphasizing that it was still conducting due diligence on the acquisition. It added that it had made no specific decision at the time.
Photo: Markus Mainka | Shutterstock
While Jeju Air is primarily a low-cost carrier, operating a passenger fleet of 40 Boeing 737 aircraft, it has a pair of Boeing 737-800 Boeing Converted Freighters (BCF). It took delivery of the two converted passenger aircraft, registered as HL8295 and HL8527, in June 2022 and November 2023, respectively.
Related
A Look At The Fleet Of South Korean LCC Jeju Air
The airline only operates one type of aircraft.
Forced sale by regulators
Asiana Airlines has been forced to sell its cargo subsidiary’s assets by the European Commission (EC), which conditionally approved its merger with Korean Air in February. One of the conditions was that Korean Air would commit to divesting Asiana Airlines’ freight assets, which include:
- Aircraft
- Slots
- Traffic rights
- Flight crew and other employees
- Cargo Contracts and more
Photo: Vincenzo Pace I Simple Flying
“Korean Air can only implement the acquisition of Asiana following the Commission’s approval of a suitable buyer for the cargo divestment.”
In addition, the EC said that the buyer of the assets must operate the cargo business in a viable manner, namely that it would compete against Korean Air after its acquisition of Asiana Airlines. Korean Air has its own cargo subsidiary, with Korean Air Cargo operating 23 aircraft: four Boeing 747-400F, seven 747-8F, and 12 777Fs. However, the United States regulators have not approved the merger yet, meaning that the company could be forced to divest more assets to finalize the acquisition of Asiana Airlines.
Related
Korean Air-Asiana Airlines Merger Gains European Approval
Korean Air and Asiana Airlines have agreed to certain divestments to satisfy the EU’s competition regulators.
Three remaining bidders
Nevertheless, as reported by The Korean Economic Daily, Air Premia, Eastar Jet, and Air Incheon remain the three companies interested in acquiring Asiana Airlines Cargo assets. The outlet added that the subsidiary is worth up to KRW500 billion ($363.1 million), making it a sizable acquisition for any interested party.
Photo: InsectWorld I Shutterstock
Out of the three, only Air Incheon currently operates cargo aircraft. Ch-aviation data showed that the airline has four Boeing 737-800 converted freighters, delivered between February 2021 and June 2022. Meanwhile, Air Premia has five Boeing 787-9 aircraft, while Eastar Jet has ten Boeing 737s, split between four 737 MAX 8 and six 737-800 aircraft.
Related
Boeing Celebrates Delivery Of 150th 737-800BCF Aircraft
The company expects over 1,000 converted planes will be needed over the next 20 years to meet demand.
