South Korea's Ministry of Land, Infrastructure and Transport has approved the sale of the Asiana Airlines (OZ, Seoul Incheon) cargo business to Air Incheon (KJ, Seoul Incheon). According to the local-language Maeil Business Newspaper, the ministry granted the approval at the end of March and Asiana now intends to close the sale by mid-2025.
Air Incheon paid KRW470 billion won (USD528 million) to buy Asiana's cargo unit, which was sold to secure European Commission approval for Asiana to merge with Korean Air. Among other things, the Europeans had expressed significant concerns about the competitive impact of the enlarged Korean Air/Asiana Airlines entity on freight routes between Korea and Europe.
Air Incheon currently operates four B737-800(SF)s and a single B747-400(BDSF). The Asiana purchase will see Air Incheon add four more B747-400(BDSF)s, six B747-400FSCDs, and a single B767-300F to its fleet, along with around 800 employees.
The majority owners of Air Incheon, Socius Private Equity, have spearheaded an investment consortium to raise KRW430 billion (USD300 million) to cover the acquisition cost. To date, the consortium has raised KRW250 billion (USD175 million), including KRW100 billion (USD70 million) from engine component manufacturer Inhwa Precision and KRW150 billion (USD105 million) from Hyundai Glovis, an affiliate of Hyundai Motor Group.
The Chosun Ilbo digital newspaper reports that Hyundai Motor Group is considering buying some of the remaining balance via affiliates Hyundai Commercial and Hyundai Motor Securities. The investment amount is undisclosed, but the newspaper says it may run into the "hundreds of millions of won." If that occurs, Hyundai will become a major shareholder in Air Incheon and a player in the Korean aviation market.
