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SEOUL : The board of South Korea’s Asiana Airlines agreed on Thursday to sell its cargo service, helping clear the way for a proposed merger with Korean Air Lines, news agency Yonhap reported.
Selling Asiana’s air cargo business and divesting routes to some European Union cities is a remedy prepared by Korean Air, South Korea’s biggest carrier, to gain EU antitrust approval for acquiring its rival.
Korean Air is expected to submit a package including the proposed sell off of the cargo operation to the European Commission as soon as Thursday, according to the Yonhap report.
However, Korean Air’s acquisition plan still needs approval from the EU, the United States and Japan.
Asiana could not immediately be reached to confirm the report.
Asiana creditors, including state-run lender Korea Development Bank, have been looking for a new owner of the debt-laden carrier for several years. Korean Air agreed to acquire Asiana in 2020 during the COVID-19 pandemic.
As of the first half of 2023, Asiana operated 11 cargo planes according to a company filing. The cargo service has 21 routes to 25 cities in 12 countries around the world, including the United States, Germany and Russia. It held a 20.7 per cent share of South Korea’s overseas cargo market.
Shares in Asiana were trading up 5.90 per cent, versus the benchmark KOSPI’s 1.64 per cent rise as of 0312 GMT.
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