Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Asiana Airlines' cargo business up for sale
Asiana Airlines and Korean Air planes are parked at Incheon International Airport in Incheon, Jan. 31. Yonhap
By Anna J. Park
Korean Air aims to complete cargo business sale by October
Upon receiving a conditional approval from the European Union (EU) over the merger between Korean Air and Asiana Airlines, the sale of Asiana Airlines' cargo business has officially kicked off, as selling off the freight arm was part of the conditions to receive the EU grant over the merger deal.
According to the investment banking industry on Tuesday, UBS, the lead advisor for the sale of Asiana Airlines' cargo business, has recently distributed investment memoranda and non-disclosure agreements (NDAs) to potential acquirers of the cargo business.
Potential buyers are largely anticipated to include four domestic low-cost carriers — Jeju Air, EastarJet, Air Premia and Air Incheon.
As UBS plans to soon distribute bid proposals to potential buyers that sign NDAs, companies interested in acquiring the cargo business are expected to submit their drafts of bid proposals, specifying plans for financing and business strategies, among others, by the end of this month.
Korean Air, the seller, plans to select a shortlist of the final group of potential acquirers after receiving bid proposals, aiming to complete the sale by October at the latest.
Currently, the airlines mentioned as potential acquirers are considering various approaches to source funding, including utilizing the financial strength of their major shareholders or forming consortia with strategic investors to proceed with the acquisition.
Asiana Airlines' freight business currently operates 11 cargo aircraft, including eight owned cargo planes and three leased ones, posting an annual revenue of 1.67 trillion won ($1.25 billion) last year. The cargo arm accounts for about 24 percent of Asiana Airlines' earnings.
Market watchers estimate that the sale price for the cargo business would fall between 500 billion to 700 billion won.