South Korean cargo airline Air Incheon has won the contract to acquire Asiana Airlines' cargo business as part of its planned merger with Korean Air. Korean Air announced this after Air Incheon emerged as the preferred bidder in a competition with Air Premia and Eastar Jet.
The sale of the cargo business was a prerequisite for the European Commission to approve the merger between Korean Air and Asiana Airlines. The deal includes eleven cargo aircraft, slots, flight rights and employees.
Air Incheon is expected to pay approximately KRW 500 billion (USD 362,5 million) for the acquisition. The decision in favor of Air Incheon was made based on several key criteria, including the certainty of the transaction completion, the long-term competitiveness of the air cargo business and the ability to mobilize financing through a competent consortium.
The preferential bidding grants Air Incheon exclusive negotiating rights until July 15, 2024 (extendable until July 31). The financing is supported by Socius Capital, Korea Investment Partners, Inhwa Precision, Korea Investment & Securities Company and Shinhan Securities, among others.
The acquisition would make Air Incheon Korea's second-largest cargo airline. The airline currently operates cargo flights from Seoul Incheon to Chengdu, Chongqing, Tokyo Narita, Yantai and Yuzhno-Sakhalinsk. Korean Air plans to sign a framework agreement with Air Incheon in July, subject to approval by the European Commission and US authorities.
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