The controversy surrounding the “Asiana Airlines Cargo Business Separation Sale,” which has emerged as a key issue in the merger of Korean Air and Asiana Airlines, is intensifying. As the Asiana Airlines board is set to decide on the separation sale of the cargo business on Oct. 30, both current and former employees of the company, as well as airline pilots, are advocating against the sale, leading to growing opposition within the aviation industry.
The labor unions of Asiana Airlines and the Korean Public Service and Transport Workers’ Union held a press conference in front of the Government Seoul Complex on Oct. 24, stating, “The merger of Korean Air and Asiana Airlines is not for the national interest, public convenience, or the development of the aviation industry. Stop the attempt to separate and sell.” They argue that if Asiana Airlines separates and sells its cargo business, reducing aircraft and personnel, and transfers airport landing slots to foreign airlines, it will result in a decrease in public benefit, a weakening of the competitiveness of the aviation industry, and national losses. Since Oct. 16, the unions have been collecting signatures from all employees opposing the merger.
Former CEOs of Asiana Airlines have also joined the opposition. It was recently reported that former CEOs of Asiana Airlines sent a letter to the board members, requesting the rejection of the separation sale of the cargo business during the board meeting. The Airline Pilots Association of Korea, composed of airline pilots, also released a statement on Oct. 11, demanding, “Stop the merger that goes against the national interest.”
Previously, European Union (EU) competition authorities have requested corrective measures such as the sale of the cargo business and slot relinquishment, expressing concerns about the potential monopoly of major passenger and cargo routes between Europe and South Korea if Korean Air and Asiana Airlines merge. Airlines require approval not only in their home countries but also in the countries they operate in for mergers and acquisitions. Therefore, Korean Air is set to finalize a corrective plan that includes slot relinquishment on routes between Incheon Airport and four European cities – Frankfurt, Barcelona, Rome, and Paris – and the separation sale of the cargo business. This plan is scheduled to be submitted to the European Commission (EC) by the end of this month.
Meanwhile, Kang Seok-hoon, chairman of Korea Development Bank (KDB), stated during the parliamentary audit at the National Assembly’s National Policy Committee on the same day, “[If the merger falls through,] the possibility of recovering the 3.6 trillion won [US$2.67 billion] in public funds becomes very low. We hope that the [Asiana Airlines] board will make a reasonable decision.” KDB is one of the creditors of Asiana Airlines.