The board of Asiana Airlines Inc., South Korea’s second-largest air carrier, convened Monday to decide whether to divest its cargo business, as Korean Air Co. seeks to gain European Union (EU) approval for its takeover of the rival.
The EU antitrust regulators have raised worries that the acquisition of Asiana may restrict competition in the passenger and cargo air transport services between the EU and South Korea.
The board meeting, which has continued for over six hours, is being closely monitored by stakeholders, including Asiana’s union and employees, as the outcome could potentially make or break the acquisition deal that has been pursued for the past three years.
The board’s five members — one internal and four outside — are reportedly debating whether the sale of the cargo business will ultimately serve in the interest of Asiana’s shareholders.
The board originally comprised of six members, but Jin Kwang-ho, head of Asiana’s safety and security division and one of Asiana’s two internal board members, offered to resign, citing personal reasons.
Jin was widely known to have been against the cargo business sale. His sudden departure portended a heated debate within the board ahead of the meeting.
Asiana is expected to announce the decision by the board no later than Tuesday.
Korean Air, the larger of South Korea’s two full-service airlines, also convened its own board meeting Monday to discuss remedial measures to address concerns raised by the European Commission (EC), the EU’s executive body.
Korean Air plans to submit formal remedies by the end of the month. It is widely believed that Korean Air seeks to include the sale of Asiana’s cargo business and divesting of landing slots for four European cities.
In a statement sent to Yonhap News Agency, Korean Air said it is “working closely with the EC and will submit formal remedies by the end of the month as requested by the authority to address the concerns.”
Korean Air has reportedly decided to retain the workers of Asiana Airlines on the condition that Asiana agrees to sell its cargo business for the takeover deal to be approved by EU regulators.
Unionized workers at Asiana Airlines have expressed opposition to such a move to sell off the cargo division, citing concerns of possible layoffs.
This file photo from June 7, 2023, shows an Asiana Airlines plane taking off from Incheon International Airport, west of Seoul. (Yonhap)
Asiana Airlines’ board is currently deliberating on whether to dispose of its cargo business in order for the EU to approve the takeover of Korean Air.
Korean Air has proposed to keep Asiana’s current employees if the cargo business is sold, but the unionized workers are concerned about the potential for job loss.
odissy@yna.co.kr
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