Korean Air Seeks to Buy Asiana (Recent News Article)
Nov 14, 2020, 3:37 am
#1
Original Poster
Join Date: Dec 2010
Location: Gangnam-gu, Seoul, Korea
Programs: KE Skypass Morning Calm Member, OZ Club
Posts: 2,352
Korean Air Seeks to Buy Asiana (Recent News Article)
From the Korea Times: https://www.koreatimes.co.kr/www/tec...74_299258.html
I posted this in Korean Air, too, but of course different alliance, different customers, slightly different audience so I think it's ok to post twice.
Now I know here will miss Asiana service and OZ Club etc, but overall I mean the market wouldn't be too damaged by it....or would it? Thoughts?
I posted this in Korean Air, too, but of course different alliance, different customers, slightly different audience so I think it's ok to post twice.
Now I know here will miss Asiana service and OZ Club etc, but overall I mean the market wouldn't be too damaged by it....or would it? Thoughts?
Nov 15, 2020, 12:53 pm
#3
Join Date: Nov 2004
Location: Los Angeles, CA; Philadelphia, PA
Programs: OZ Diamond
Posts: 6,134
From the Korea Times: https://www.koreatimes.co.kr/www/tec...74_299258.html
I posted this in Korean Air, too, but of course different alliance, different customers, slightly different audience so I think it's ok to post twice.
Now I know here will miss Asiana service and OZ Club etc, but overall I mean the market wouldn't be too damaged by it....or would it? Thoughts?
I posted this in Korean Air, too, but of course different alliance, different customers, slightly different audience so I think it's ok to post twice.
Now I know here will miss Asiana service and OZ Club etc, but overall I mean the market wouldn't be too damaged by it....or would it? Thoughts?
LAX
Nov 15, 2020, 4:56 pm
#4
Join Date: Jan 2017
Location: PHX, ICN
Programs: OZ Diamond Plus, Marriott Gold
Posts: 502
I've argued that South Korea needs 2 majors, given ICN's prominence and the strong business climate here. It seems like Korean Air would be too massive without a major divestiture, which then feels like it's pointless except to maybe bailout OZ's shareholders to some degree. I think it would serve the market better to have OZ survive as even a 3rd tier international long haul carrier, because I can't see a Korean Air with 60% of all Korean originated flights being good for customers, corporate or retail. But I am no air business expert, so...grain of salt.
Nov 15, 2020, 9:17 pm
#5
Original Poster
Join Date: Dec 2010
Location: Gangnam-gu, Seoul, Korea
Programs: KE Skypass Morning Calm Member, OZ Club
Posts: 2,352
Nov 15, 2020, 9:18 pm
#6
Original Poster
Join Date: Dec 2010
Location: Gangnam-gu, Seoul, Korea
Programs: KE Skypass Morning Calm Member, OZ Club
Posts: 2,352
Re: I understand the point of no monopolies, etc. and the Korean government is VERY protective in this regard....and of course shareholders will be pissed
But I just mean logically from a consumer perspective - Asiana didn't really offer much difference from KE IMO and I mean their pricing was exactly the same. Not like they were diversifying much.
Of course there is all their LCC operation that adds to the complexity...
But I just mean logically from a consumer perspective - Asiana didn't really offer much difference from KE IMO and I mean their pricing was exactly the same. Not like they were diversifying much.
Of course there is all their LCC operation that adds to the complexity...
Nov 15, 2020, 9:34 pm
#7
FlyerTalk Evangelist
Join Date: Dec 2003
Location: USA
Programs: UA Platinum, 1MM
Posts: 13,460
The Korean Herald said Korean is purchasing Asiana: Korean Air to buy Asiana, emerges as world's 10th-largest airline
"Korean Air Lines Co., South Korea's biggest carrier, said Monday that it will buy its smaller local rival Asiana Airlines Inc. in a deal valued at 1.8 trillion won ($1.62 billion) that would create the world's 10th-biggest airline by fleets.
Korean Air plans to buy new shares worth 1.5 trillion won to be sold by Asiana, and buy bonds to be floated by the smaller carrier, the company said in a regulatory filing.
Korean Air, currently the world's 18th largest, will acquire a 30.77 percent stake in Asiana from the debt-laden carrier's creditors led by the Korea Development Bank (KDB)."
Not positive for staying in Star Alliance. Asiana always had good availability for award seats.
"Korean Air Lines Co., South Korea's biggest carrier, said Monday that it will buy its smaller local rival Asiana Airlines Inc. in a deal valued at 1.8 trillion won ($1.62 billion) that would create the world's 10th-biggest airline by fleets.
Korean Air plans to buy new shares worth 1.5 trillion won to be sold by Asiana, and buy bonds to be floated by the smaller carrier, the company said in a regulatory filing.
Korean Air, currently the world's 18th largest, will acquire a 30.77 percent stake in Asiana from the debt-laden carrier's creditors led by the Korea Development Bank (KDB)."
Not positive for staying in Star Alliance. Asiana always had good availability for award seats.
Nov 15, 2020, 9:58 pm
#8
Join Date: Oct 2009
Location: Somewhere over the rainbow
Programs: Airline Free Agent, Bonvoy Platinum, Hyatt Globalist
Posts: 3,811
From a FFP standpoint, I'm not a fan of this merger. OZ has a better FFP for redemptions, especially with KE's upcoming devaluation next year. *G status is more useful than STE+ status internationally, specifically for lounge access. As someone who travels to Korea quite often to visit family, I always liked how there were two options outside of the US-airlines when I would travel between the US and ICN. So, I would hate to see this no longer be an option.
Hopefully, the SK government rejects this merger since it would give KE a monopoly on long-haul and cargo to/from ICN.
Hopefully, the SK government rejects this merger since it would give KE a monopoly on long-haul and cargo to/from ICN.
Nov 16, 2020, 5:41 am
#10
Join Date: Jan 2017
Location: PHX, ICN
Programs: OZ Diamond Plus, Marriott Gold
Posts: 502
Re: I understand the point of no monopolies, etc. and the Korean government is VERY protective in this regard....and of course shareholders will be pissed
But I just mean logically from a consumer perspective - Asiana didn't really offer much difference from KE IMO and I mean their pricing was exactly the same. Not like they were diversifying much.
Of course there is all their LCC operation that adds to the complexity...
But I just mean logically from a consumer perspective - Asiana didn't really offer much difference from KE IMO and I mean their pricing was exactly the same. Not like they were diversifying much.
Of course there is all their LCC operation that adds to the complexity...
But as *A it's so obviously better, IMHO. And they are going to both raise prices and cut benefits of the FFP if they are the monopoly carrier for Korea. It would be a miracle if they didn't, and I don't believe in miracles.
So even if OZ didn't offer much compared to KE in a world where they both exist, I can't see how (or why, from their point of view) a dominant KE will offer more than what OZ offers now.
Nov 16, 2020, 6:45 am
#12
Join Date: Dec 2006
Location: IND
Posts: 2,005
Price was similar due to competition. Monopoly routes (ICN-ATL/DFW/BOS) are several hundred dollars more expensive than competing routes (ICN-JFK/LAX). We'll see price hike from NY and LA soon now that all routes will become monopoly. KE charges premium over UA or AA many times, so the argument denying monopoly and saying that KE is anyhow competing against foreign airlines is only partially true.
Nov 16, 2020, 4:05 pm
#15
Join Date: Mar 2015
Location: YVR
Posts: 1,082