Korean Air to kick off Asiana cargo unit sale in Feb.

As conditional approval for the merger of South Korea’s Korean Air Lines Co. and Asiana Airlines Inc. is likely from the European antitrust authority, the sale of Asiana Airlines’ cargo business is expected to begin next month.

According to industry sources on Monday, Korean Air plans to launch the sale of Asiana Airlines’ cargo unit immediately after receiving approval from the European Commission (EC), which is expected as early as in early February.

The sale of Asiana Airlines’ cargo unit was proposed by Korean Air as part of its revised remedy submitted to the European authority.

Following Friday’s media report on the potential approval from the European authority for the merger of the two South Korean airlines, observers suggest that Korean Air and the European authority likely have reached some degree of agreement. Korean Air reportedly made multiple revisions of its proposed remedies until the end of last year, incorporating opinions from the EC since submitting its initial remedy plan in November.

Market insiders expected that Korean Air is likely to distribute information memoranda (IM) to potential buyers and commence formal procedures in February. Korean Air has reportedly engaged with major candidates, including low-cost carriers (LCCs), to assess market demand, with the goal of completing the sale within the year.

Local LCCs including Jeju Air Co., Air Premia Inc., and Air Incheon Co., and domestic and international logistics companies, are reportedly expressing interests in the sale.

Following the news of imminent approval, T’way Air Co., the Korean airline set to take over some slots for routes in Frankfurt, Barcelona, Rome, and Paris, has also started local recruitment, hiring ground staff to work at Paris Charles de Gaulle from February 4. This is believed to be an active move in preparation for the slot transfer process following the anticipated conditional approval for the merger.

Korean Air and Asiana Airlines, in the meantime, await pending approvals also from the U.S. and Japanese antitrust authorities.