Korean Air and Korea Development Bank are in the process of selecting a preferred buyer for Asiana Airlines’ cargo arm, with two of the four shortlisted suitors making strategic moves to improve their chances.
Eastar Jet, a South Korean low-cost carrier that temporarily gave up its air operator certificate during the Covid pandemic, recently applied to regain it and successfully received it on March 6. This move allows Eastar Jet to once again carry bellyhold cargo, positioning them as a strong contender for bidding on Asiana’s freight business.
In order for the European Commission to approve Korean Air’s merger with Asiana, Asiana must divest its cargo arm to another South Korean carrier. The government is pushing for this merger to help bail out Asiana, which has accumulated significant debt due to the effects of the pandemic.
Jeju Air, a leading South Korean LCC, has been favored to acquire Asiana’s cargo arm and has enlisted the help of multinational consulting firm Bain & Co to conduct due diligence on the target. Meanwhile, other suitors like Air Premia and Air Incheon have also brought in major audit firms to assist with their due diligence processes.
Asiana’s cargo unit operates a fleet of nine 747-400Fs and one 767F, valued between $382m and $535m. The new owner will need to take on the unit’s debt of over $760m. Asiana recently announced plans to renew its fleet by purchasing two B747-400 freighters from Taiwan’s China Airlines and leasing two more for six years.
A preferred bidder for Asiana’s cargo arm is expected to be chosen in late April or May.
