Korean Air Buys Asiana Airlines – Star Alliance Exits Korea?

In what is likely the beginning of the end of Asiana Airlines, Korean Air (KE) reportedly will be buying Asiana (OZ) for $1.6 billion USD (1.8 trillion won).

According to Reuters, the deal will make Korean Air the top stakeholder of Asiana. Korean Air is a member airline of Skyteam, while Asiana is currently a member of Star Alliance.

First Major Merger Since COVID-19

To no one’s surprise, COVID-19 pandemic has brought airline industry worldwide to its knees with airlines big and small struggling for survival. Asiana is no exception. Heavily indebted, Asiana last received a cash injection from its creditors in September. The deal will create the world’s 15th biggest airline based on kilometers flown by paying passengers.

The transaction is expected to be completed by the second half of 2021. It is said there will be no “artificial restructuring” for the time being. However, Asiana’s brand will be phased out once the merger is done and both airlines integrated:

For the time being, Korean Air and Asiana will operate as independent affiliates, but once integrated, Asiana’s brand will be phased out,” a Korean Air spokeswoman told Reuters.

The End of Star Alliance Presence in Korea?

Assuming the merger is a go, this effectively puts an expiration date on Asiana, meaning Star Alliance will be left without an airline partner in South Korea once the merger is complete and Asiana fully integrates into Korean Air. Skyteam will essentially has monopoly when it comes to travel and transit in South Korea. Star Alliance flyers, including United Airlines’ MileagePlus and Air Canada’s Aeroplan elites, will now have one less option in earning or redeeming miles with travel to or transit in Korea.

Star Alliance will still have presence nearby with ANA (NH) in Japan, Air China (CA) in China, and EVA Air (BR) in Taiwan.

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