Key facts
- Korean Air estimates integration costs for Asiana Airlines could be between 900 billion and 1 trillion won.
- Annual synergy effects from the merger are projected to be around 300 billion won.
- Korean Air anticipates that integration costs will be fully offset by late 2028 or early 2029.
- The goal is to launch the integrated carrier by December 17, operating 230 aircraft and generating 23 trillion won in revenue.
- The airline aims to integrate mileage programs before its August shareholders' meeting.
Korean Air Co. announced on Friday that the integration of Asiana Airlines Inc. could incur costs of up to 1 trillion South Korean won (approximately US$654.02 million). The airline projects that the synergy effects resulting from the merger will offset these expenses, potentially as early as the end of 2028.
During an investor relations session in Seoul, Korean Air detailed that its post-merger integration (PMI) strategy estimates costs ranging from 900 billion to 1 trillion won. Conversely, the annual synergy effects are anticipated to reach around 300 billion won. Park Hee-don, a senior vice president at Korean Air, expressed optimism that these synergy effects could surpass the initial projections, stating, "If things go well, we believe the integration costs could be fully offset sometime between the end of 2028 and early 2029."
The airline plans to finalize the launch of the integrated carrier by December 17, with the ambition of becoming a global top 10 airline. The combined entity is expected to operate 230 aircraft and generate 23 trillion won in annual revenue.
Regarding the integration of the two airlines' mileage programs, Korean Air indicated its hope for a swift finalization process, ideally before its shareholders' meeting scheduled for August.