Korean picks Air Incheon as preferred Asiana Cargo bidder

Air Incheon has been named as the preferred bidder for the sale of Asiana Airlines’ cargo business as part of Korean Air’s much-delayed acquisition of Asiana Airlines.

Republic of Korea-based airlines Eastar Jet, Air Premia and Air Incheon had in April all reportedly submitted bids to acquire the cargo business, but Air Incheon was selected as the primary candidate at Korean Air’s board of directors meeting held on June 17, according to a press release by Korean Air.

Asiana Airlines’ cargo business is being sold, at an estimated price of $219-$364m, in order for Korean Air to secure regulatory approval to acquire Asiana Airlines and as such, Korean Air needed to select the company it believed was best placed to handle the cargo business.

Korean Air said it had picked Air Incheon as the preferred bidder based on the certainty of completing the transaction, the ability to maintain and enhance long-term competitiveness of the air cargo business and the capability to mobilise funds through a competent consortium.

Korean Air plans to sign a framework agreement with Air Incheon in July after agreeing on the contract conditions. The agreement is subject to review by the European Commission.

“The preferred bidder was selected through a comprehensive evaluation of all factors crucial to the growth of the air cargo industry, a key national industry, while maintaining the existing competitive environment,” said a Korean Air representative. “We are committed to quickly finalising the sales process through flexible negotiations, and completing the acquisition of Asiana Airlines.”

Founded in 2012 and based at Incheon International Airport, Air Incheon is the Republic of Korea’s only all-cargo airline. Air Incheon’s operations are focused in Asia, but the airline is now expected to strengthen its competitiveness by utilising Asiana Airlines’ long-haul network to the Americas and Europe and its fleet of larger cargo aircraft.

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 by 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.

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