Air Incheon signs deal to acquire Asiana Airlines’ cargo division

(Yonhap)

Air Incheon Co., a cargo specialist airline, is poised to become the second-largest air cargo operator in South Korea, following Korean Air Lines Co., with the acquisition of Asiana Airlines Inc.’s cargo division.

Air Incheon announced on Thursday that it has signed a deal with Asiana Airlines for the acquisition of its cargo division.

The sale involves separating Asiana’s cargo business and merging it with Air Incheon. The deal will be finalized once Air Incheon completes a capital increase and pays 470 billion won ($322.5 million) to Asiana Airlines by the end of June.

The sale of Asiana’s cargo division is a key condition set by the European Commission for approving the merger of Korean Air and Asiana Airlines.

In June last year, Asiana Airlines selected Air Incheon as the preferred negotiator for the sale.

Following the acquisition, Air Incheon will add 11 Asiana Airlines cargo aircraft to its existing fleet of 4, bringing its total fleet to 15.

This positions Air Incheon as the second-largest cargo airline in Korea, behind Korean Air, which operates 23 cargo aircraft.

Combined, the international air cargo transport volumes of Air Incheon (39,000 tons in 2023) and Asiana Airlines (725,000 tons) total over 760,000 tons, compared to Korean Air’s 1.46 million tons.

Air Incheon is preparing for the launch of the integrated airline at the beginning of July and has also established a new office to accommodate the growing workforce.

Challenges, however, remain, as there is employee unrest among Asiana Airlines’ cargo division staff transitioning to Air Incheon. According to the sale terms, about 800 employees, including pilots, maintenance staff, and cargo sales personnel, will transfer to Air Incheon.

The airline has reassured employees that their salaries and benefits will remain unchanged under the existing employment terms.