Korean Air Plans More Airline Mergers

Korean Air is moving ahead with many mergers as part of broader efforts to consolidate the South Korean aviation industry.

Further adjustments are planned after the approval to proceed with the takeover of the fellow South Korean company Asiana Airlines.

As part of a move to reformat how the low-cost divisions are operated, Korean Air is merging Jin Air with two other existing brands, Air Seoul and Air Busan. The latter two will consolidate into Jin Air, and this will be the only brand that will survive.

However, despite Korean Air’s interest in proceeding with such an endeavour, there has been considerable opposition to it and its potential negative ramifications.

The pushback focuses on Busan Metropolitan City and the company’s stakeholders. A move would see Air Busan completely shift into Jin Air and utilise Incheon Airport as its home.

Typically, merger and consolidation efforts are met with resistance because of their impact on businesses, government, people, stakeholders, and others; these should be studied vigorously.

As part of consolidation efforts, compromises are commonly made, and deal adjustments must be formulated to please all parties. However, this can sometimes be a truly impossible task.

Regarding Korean Air’s planned consolidation efforts, the company focuses primarily on the local community. The public is concerned that it will lose its regional flagship carrier, necessary for a new airport opening in 2029.

Moreover, some believe that Air Busan could act independently as its airline, which would better serve the community than being absorbed by Korean Air and thus placed into Jin Air.

However, launching an independent airline seems like more of a dream than a reality. Instead, the shuffling of headquarters would likely be the best outcome, according to local South Korean reporting.

By all accounts, Air Busan appears to be an essential asset to maintain, which is why its business will be absorbed into Jin Air; however, challenges begin to emerge in finding the best way to balance this consolidation with meeting stakeholders’ expectations.