Four low-cost carriers (LCCs) -- Jeju Air, Air Premia, Eastar Jet, and Air Incheon -- participated in a preliminary tender for the sale of Asiana Airlines’ cargo business division.
The four LCCs submitted letters of intent (LOIs) after UBS, the sale organizer, finished accepting LOIs for the preliminary tender for the sale of Asiana’s cargo business division according to industry sources on Feb. 28.
T’way Air did not hand over its LOI in the tender, nor did another candidate, Aero K Airlines.
Asiana Airlines’ cargo business division has annual revenue of more than 1 trillion won, and the sale price is estimated to be between 500 and 700 billion won.
Korean Air submitted a corrective plan to the European Commission in November last year that included the sale of Asiana’s cargo business. The EU approved a merger between Korean Air and Asiana Airlines on the condition of implementing these corrective measures in the plan.
Asiana’s cargo planes are more than 30 years old, so the acquiring company will have to massively invest in the future, experts say.
Accordingly, Jeju Air, which is part of AK Group, is considered the most advanced in terms of financial power.
Korean Air and Korea Development Bank, which is Asiana Airlines’ creditor, will soon shortlist qualified bidders and conduct due diligence.
The final selection of a buyer is expected to be made within this year. However, even if a buyer is selected, the sale will still need to be approved by the EU.