government has officially announced the plan for the merger between Korean Air and Asiana.
Through the integration of the two major airlines, we will support them to achieve the world's top 10 transportation competitiveness.
Reporter Je Hee-won reports.
First, Korea Development Bank decided to support the acquisition of Asiana Airlines by investing KRW 800 billion in Hanjin Kal, the parent company of Korean Air.
This is a method that the Korea Development Bank invests 500 billion won in Hanjin Kal through a paid-in capital increase and takes over 300 billion won worth of exchange bonds.
Hanjin Kal intends to promote Korean Air's paid-in capital increase with an amount of KRW 2.5 trillion and to purchase Asiana shares to promote integration.
On the 16th, the Korea Development Bank reported on such investment plans at a meeting of ministers related to strengthening industrial competitiveness presided over by Deputy Prime Minister Hong Nam-ki.
The consolidation of the two major airlines is expected to create a large national airline with the world's seventh-class transport volume.
The Ministry of Land, Infrastructure and Transport assessed that the survival of Asiana Airlines will be difficult in the situation where the corona continues, and the acquisition of Korean Air will provide an opportunity to overcome the crisis and develop the aviation industry.
However, as Hanjin Kal's largest shareholder, the KCGI Alliance, which is struggling for management rights, is against the acquisition, it is expected to be difficult to consolidate.
As the two companies merge, large-scale restructuring and reduction of routes are inevitable, and internal opposition, including the labor unions of the two companies, may arise.
The Korea Development Bank said that low-cost airlines such as Jin Air, Air Busan, and Air Seoul will pursue phased integration.