mh3265a

As many have probably read by now, KAL has bought out Asiana and is beginning the process of integrating the two competitors.

Link to stories: Nikkei Asia | The Points Guy

I wonder what impact this will have on having a Korean partner in *A. I assume any award tickets currently booked are OK but not clear. Also, how will UA handle codeshare flights? I know they sell Korean Air tickets as an option for certain city pairs but wonder how they will handle this development. I suspect this isn't a major market but OZ flew most of the Japan-Korea market flights so wonder if ANA will look to pick those up and compete with KAL.

JimInOhio

The PointsGuy article seems to indicate KAL and Asiana will remain separate airlines while their LCCs will be combined. There is precedent for separate affiliations with EI partnering with UA despite the rest of the IAG group being in OneWorld.

mh3265a

Yeah I noticed that as well but Nikkei and other business oriented sources seem to suggest a consolidation. If they do remain separate entities then this whole commentary is OBE but I'd be surprised if KAL doesn't gobble up Asiana. I admit ignorance to ROK laws pertaining to something like this.

drewguy

It doesn't seem to be clear. Ultimately there will be a consolidation of ownership (though apparently labor unions and the Korea Development Bank will have stakes as well). But that doesn't necessarily mean they'll have a single brand (or two - legacy plus LCC). And it may take a year or more for regulatory approvals, including antitrust, both in Korea and globally.

LAX

I don't see how running the two airlines as separate entities can be beneficial. Unless KE wants to keep membership in both alliances to give it some leverage when negotiating deals.

LAX

Holometer3D

From what I can tell from Korean media, the plan is to operate separate brands for now, and consolidate into one carrier gradually. You all probably have a year or two at least to make necessary moves.

The antitrust regulator agency in Korea will not look at this favorably, and there is a lawsuit filed by a major investor group of KE because they were plotting a hostile takeover of the company. That said, it is likely that the government will find a way to make this happen. The government is on the hook for a huge part of Asiana's debt, and they have no other takers, not to mention that in this kind of environment there is no market for two full-service carriers to survive in Korea (this was already the case before the pandemic) so the government is just trying to save the aviation industry and the associated jobs. In many ways, Korean Air is doing the government a favor: It could just let Asiana fail, and not take on its 2000% debt. Korean Air has little incentive to take on additional planes and employees during this economic climate when it is itself under 1000% debt. Korean Air probably likes Asiana's slot rights and what not, but again, it could gobble up Asiana and its assets for pennies on the dollar if the company has to liquidate. In exchange for this favor, the government will likely guarantee a stable future for Korean Air and its ownership group. The antitrust concerns are significant under Korean law, but perhaps not a deal-breaker because Asiana was inevitably going to go bankrupt and hand over a monopoly to Korean Air anyway.

garykung

I doubt that KFTC will let that one go.

Gasolin

HDC would love the same conditions presented to Hanjin KAL so it is likely they will also ask for something. Also, their lawsuit regarding their failed deal is not over yet. However, if that goes through, OZ will be fully merged into KE and disappear. That was already clarified in the Korean medias.

Gasolin

And for those who are interested, the OZ pilots part of a trade union have launched a petition with the blue house.
You can always make your voice heard .

https://www1.president.go.kr/petitions/593986

exp

Now there is news that Japanese govt. wants to require ANA and JAL to merge before govt. relief of these two airlines.

So *A could lose a partner in Japan as well.

LAX

Which one is stronger financially?

LAX

exp

I'm not sure.

But man NH offered a lot of TPAC awards for UA MP members.

jh6000

Would you book a United Mileage Plus Award for 2021 on Asiana if connecting to somewhere else in Asia? (Essentially, do i risk having the award fall through if the airlines do consolidate under Korean Air?). My ultimate destination is Taiwan, and Asiana offers lots of J class to Seoul connecting to TPE.

I prefer EVA but inventory is not showing when I'd like to go

1353513636

If Asiana pulls the plug before then (which in itself is unlikely) UA will likely put you on their SFO-TPE, which, before the pandemic, operated with their brand new Polaris equipped 77W. They don't have to do this but they are usually pretty good about it.

jh6000

Thanks for your response. Sounds like there still is potential risk (I do like UA's Polaris product, but the availability for saver awards is nil). I am booking a multi-month trip, so if this outbound falls through it screws up lots of pieces. I might err on the side of caution and stick with Some other flight options.