Air Incheon to buy Asiana cargo biz for $342mn
Founded in 2012, Air Incheon is Korea’s only all-cargo airline, with operations focused in Asia
The cargo unit of Asiana Airlines will be sold to South Korean cargo carrier Air Incheon for 470 billion won ($342 million).
The board of directors of Korean Air had earlier selected Air Incheon as the preferred bidder for Asiana Airlines' freighter business.
"Korean Air selected Air Incheon as the preferred bidder based on several key criteria: the certainty of completing the transaction, the ability to maintain and enhance long-term competitiveness of the air cargo business, and the capability to mobilise funds through a competent consortium.
"Founded in 2012, Air Incheon is Korea’s only all-cargo airline, with operations focused in Asia. Air Incheon is expected to strengthen its competitiveness by utilising Asiana Airlines’ long-haul network to the Americas and Europe, and fleet of larger cargo aircraft."
The purchase will likely make Air Incheon, South Korea's second-biggest freight carrier, Reuters reported.
"The purchase would transfer Asiana's fleet, staff, customers and traffic rights to Air Incheon, which is based at Incheon airport, South Korea's main international gateway and the world's fifth-busiest cargo airport.
"Korean Air, South Korea's biggest carrier, is set to buy nearly two-thirds of Asiana for about $1.4 billion but antitrust authorities in the European Union want Asiana's cargo business sold before they give full approval."
Korean Air Q2 cargo revenue up 14%
Korean Air reported a 14 percent increase in cargo revenue at KRW 1.1 trillion (over $800 million) for the second quarter of 2024 on five percent increase in yield at KRWW 490. Cargo tonne kilometres increased nine percent to 2.2 billion.
Performance was driven by e-commerce demand from China and the shipping replacement demand.
Korean Air is expecting steady e-commerce demand (global e-commerce market expected to grow 22 percent yearly and reach 30 percent of air cargo, according to an estimate by the International Air Transport Association (IATA).
The airline is also expecting secure stable revenue from e-commerce, expanding long term contract size and destinations for existing and new customers.
Korean Air is planning to attract demand due to shipping congestion (auto parts etc) and factory expansions (semiconductor), and maximise capacity with flexible route combinations.
