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Korean Air Seeks to Buy Asiana (Recent News Article)

Old Nov 16, 2020, 3:24 pm
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Korean Air Seeks to Buy Asiana (Recent News Article)

Old Nov 17, 2020, 11:23 pm
  #31  
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For me this doesn't sound like a merger but just as an outright takeover of OZ by KE. I might be wrong but KE is significantly larger so this is not a merger of equals.
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Old Nov 17, 2020, 11:51 pm
  #32  
 
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Originally Posted by jamar
My fingers are crossed for this happening. At worst it pauses the acquisition for a time while HDC tries to make its case (I have no idea how quickly or slowly the courts there act on such matters, but regardless, it'll buy a few months). At best HDC wins its case and is willing to acquire Asiana and keep it independent.

In any case, I'm nowhere near 500k so if KE closes the merger and thus closes the door on lifetime *G, I'll have to decide if I want to go shopping for another program or stick with KE.
This will be decided before end of Jan. End of Jan, KE goes through a board meeting and the 3 way party has more vote than the Cho Family (46% vs 41% or something like that) and would be in position to remove the current CEO. After that, KE would try to buy OZ but then, real funding issues will occur, so that is to be discussed.

HDC has until end of Jan to try to make the case that if they receive the same conditions as KE, this is a deal they would consider. As described above, the difference of treatment was quite big so it can be a thought.
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Old Nov 17, 2020, 11:53 pm
  #33  
 
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Originally Posted by DownUnderFlyer
For me this doesn't sound like a merger but just as an outright takeover of OZ by KE. I might be wrong but KE is significantly larger so this is not a merger of equals.
It's a political merger, so it doesn't really matter. If KE wanted to absorb OZ, they would try to see if OZ goes bankrupt or not. Right now, this is being pushed forward by the authorities so there is not much they can do about it. There are some conditions they will have to follow which will have to make the merger acceptable, and probably look "fair". How this all gets executed is a whole different matter.
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Old Nov 18, 2020, 3:36 pm
  #34  
 
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Does anyone with a good understanding of how things work have a point of view on what this means for Asiana Club miles? I am wondering whether I ought to use them proactively as soon as possible rather than wait and see if they are devalued or become time limited in a time window which might not suit me.
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Old Nov 18, 2020, 4:25 pm
  #35  
 
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Originally Posted by HarbourGent
Does anyone with a good understanding of how things work have a point of view on what this means for Asiana Club miles? I am wondering whether I ought to use them proactively as soon as possible rather than wait and see if they are devalued or become time limited in a time window which might not suit me.
I would use them ASAP as they will either become Korean Air miles which were recently massively devalued and are almost useless except for one-way non-stop short-haul flights in economy on routes not served by LCCs or they will become completely useless. I can't imagine them not honoring tickets already issued though, so you can book as far out as the schedule allows. For example, when US Airways merged with AA, Star Alliance awards booked on the US Airways program were still valid after they switched to Oneworld and same for LATAM AFAIK.
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Old Nov 18, 2020, 9:48 pm
  #36  
 
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Originally Posted by 1353513636
I would use them ASAP as they will either become Korean Air miles which were recently massively devalued and are almost useless except for one-way non-stop short-haul flights in economy on routes not served by LCCs or they will become completely useless. I can't imagine them not honoring tickets already issued though, so you can book as far out as the schedule allows. For example, when US Airways merged with AA, Star Alliance awards booked on the US Airways program were still valid after they switched to Oneworld and same for LATAM AFAIK.
My one caveat to this advice would be that you probably don't have to burn your miles immediately. This will take time to play out, and then time to implement, and then time to accomplish. KE buying OZ is a big deal, and they won't be crushing anything currently running fine within OZ for months afterwards, and I'd bet 1+ years. That said, KE has shown they will give no notice before they announce changes (See what they did with their own program) - but still, most of those plans didn't start going into effect for some time.

So I'd plan to use miles sooner-rather-than-later, but I wouldn't book something now just to burn them.
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Old Nov 18, 2020, 9:52 pm
  #37  
 
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Originally Posted by 1353513636
Ahh...so basically one chaebol outsmarted another in using the government so no more Asiana...

They had a pretty reasonable path to profitability, if they could just separate themselves from the Kumho group that kept using Asiana's profits to help other parts of Kumho instead of buying new planes that they desperately needed, but clearly the Cho family has a lot of sway over the Korean government and this deal is very very good for them.

HDC might be one of the biggest losers from this deal, not just because they didn't get to buy Asiana, but because they will only have one choice for corporate travel. There's a lot of competition in the Korea international market and the 3rd country transit via Korea market, but this is gonna hurt Seoul-based companies needing an airline for business travel because if they want to have a managed corporate travel type program, KE will be the only choice, and it may be the only nonstop option on many routes (and let's face it, execs of big Korean companies aren't going to be flying LCCs), allowing them to charge quite a bit.....I have to wonder if another conglomerate without an airline might suddenly become interested in buying Asiana given the alternative is paying a lot more for corporate air travel for the forseeable future.
This has been my (admittedly hot) take from the beginning of OZ's woes. Why would the other chaebols allow all corporate air travel to be funneled to one of their competitors? That's enormous pricing power, and I just can't understand why a coalition wouldn't band together to block such a takeover, even if they weren't willing to buy OZ themselves. Again, no expert on Korean business, but from a general standpoint, giving a rival carte blanche to settle all your travel costs is crazy.
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Old Nov 18, 2020, 10:03 pm
  #38  
 
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Originally Posted by SightseeMC
My one caveat to this advice would be that you probably don't have to burn your miles immediately. This will take time to play out, and then time to implement, and then time to accomplish. KE buying OZ is a big deal, and they won't be crushing anything currently running fine within OZ for months afterwards, and I'd bet 1+ years. That said, KE has shown they will give no notice before they announce changes (See what they did with their own program) - but still, most of those plans didn't start going into effect for some time.

So I'd plan to use miles sooner-rather-than-later, but I wouldn't book something now just to burn them.
KE giving no notice is not true; the recent Skypass changes basically decimate the value of the program but they were announced more than 1 year in advance before the first change comes into effect.
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Old Nov 18, 2020, 11:28 pm
  #39  
 
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Originally Posted by 1353513636
KE giving no notice is not true; the recent Skypass changes basically decimate the value of the program but they were announced more than 1 year in advance before the first change comes into effect.
Did the KE Skyteam chart get devalued as well? I know KE used to be 40k o/w in J from US-Europe just like OZ, did that go up?
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Old Nov 19, 2020, 12:32 pm
  #40  
 
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Originally Posted by zeer0
Did the KE Skyteam chart get devalued as well? I know KE used to be 40k o/w in J from US-Europe just like OZ, did that go up?
KE was never 40k o/w, only 80k RT for NA-Europe business, but yes partner chart decimated equally badly.
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Old Nov 19, 2020, 1:09 pm
  #41  
 
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Thanks for the perspective on using one's outstanding Asiana miles - very helpful.
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Old Nov 19, 2020, 4:29 pm
  #42  
 
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Originally Posted by 1353513636
KE was never 40k o/w, only 80k RT for NA-Europe business, but yes partner chart decimated equally badly.
I finally found the page with the new award charts, holy .... this is TERRIBLE! I didn't realize they were switching to a distance-based chart like Avios, with most longhaul redemptions literally doubling in price. I just redeemed some miles for a winter trip to Brazil, and I'll be looking to get rid of the rest with 1 last Europe redemption in the summer.

This is going to be an absolutely worthless program. Redeem your miles ASAP everybody!!
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Old Nov 19, 2020, 5:13 pm
  #43  
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Originally Posted by zeer0
I finally found the page with the new award charts, holy .... this is TERRIBLE! I didn't realize they were switching to a distance-based chart like Avios, with most longhaul redemptions literally doubling in price. I just redeemed some miles for a winter trip to Brazil, and I'll be looking to get rid of the rest with 1 last Europe redemption in the summer.

This is going to be an absolutely worthless program. Redeem your miles ASAP everybody!!
There are practical problems as in most countries are in lockdown so you can't go unless you have citizenship. Tourist is the last to be allowed in after everyone gets vaccinated likely in spring/summer 2021.

There may also be other offers to Asiana by other South Korean firms now vaccine is in sight. We thought Hyundai was going to buy Asiana just like end of last year. Now it's Korean Air. Maybe tomorrow it's Samsung or others. It's not settled until the process passed regulatory anti-trust issues.

Even if Korea Air is buying Asiana is approved, the deal doesn't close until at least summer 2021. Then it will be another year or two or three for integration. If we use Marriott swallowing SPG as an example, it was 2015. It wasn't until 2018 before the frequent staying guest programs were merged. So unless South Koreans are super efficient compared to staff at Marriott/SPG, it will take about the same 3 years is my guess.
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Old Nov 20, 2020, 4:15 am
  #44  
 
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Originally Posted by yeunganson
Even if Korea Air is buying Asiana is approved, the deal doesn't close until at least summer 2021. Then it will be another year or two or three for integration. If we use Marriott swallowing SPG as an example, it was 2015. It wasn't until 2018 before the frequent staying guest programs were merged. So unless South Koreans are super efficient compared to staff at Marriott/SPG, it will take about the same 3 years is my guess.
It could be, although if we use another airline merger as an example (AA/US), one thing that people might get worried about is OZ exiting Star early. US Airways exited Star Alliance to join Oneworld a couple of years before their FFP was fully merged with AA's, so OZ being pulled out of *A to join Skyteam a couple years before the FFP merges into Skypass would affect some people's redemption options (no full Japan partner, trading TG and SQ for VN and GA and the entire LH family for AF/KL/OK, etc).
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Old Nov 20, 2020, 6:48 am
  #45  
 
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Originally Posted by jamar
It could be, although if we use another airline merger as an example (AA/US), one thing that people might get worried about is OZ exiting Star early. US Airways exited Star Alliance to join Oneworld a couple of years before their FFP was fully merged with AA's, so OZ being pulled out of *A to join Skyteam a couple years before the FFP merges into Skypass would affect some people's redemption options (no full Japan partner, trading TG and SQ for VN and GA and the entire LH family for AF/KL/OK, etc).
This is exactly my concern. I don't doubt that a merger would take a long time to complete, but OZ could exit *A a lot earlier than the completion of the merger.
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