Korean Air recently received approval from Vietnam for its business combination with Asiana. Vietnam’s Ministry of Industry and Trade stated that the business combination was acceptable according to Vietnam’s Competition Act, and asked the airline to continue to abide by the country’s competition regulations in the future. Korean Air has received clearance from competition authorities of Turkey, Taiwan, Vietnam and Malaysia since it submitted its business combination reports in January this year. The Philippine Competition Commission also announced that the submission of a business combination report was not necessary.
Korean Air is currently awaiting business combination approvals from the remaining regulatory bodies such as the competition commissions of Korea, the United States, the European Union, China and Japan. The airline is actively cooperating with the respective commissions in order to finalise the acquisition process as early as possible.
Korean Air earlier reported its financial results for Q3 2021, saying it recorded revenue of KRW 2.227 trillion (US$1.879 billion) and an operating profit of KRW 438.6 billion (US$370 million) in its third quarter financial results. The airline has attained a record quarterly operating profit since the third quarter results of 2016. The cargo business achieved revenue of KRW 1.6503 trillion (US$1.393 billion), the highest quarterly revenue recorded to date. Its strong performance can be attributed to the global supply chain bottleneck, increase in air cargo demand, and a lack of passenger flight belly cargo capacity, which have led to the increase in shipment volumes and rates.
The airline said while passenger demand remained low in the third quarter due to the spread of COVID-19 variants, stronger demand on the Americas network and the resurgence in summer domestic travel attributed to a 55 percent increase in sales compared to the second quarter, amounting to KRW 331.9 billion (US$280.1 million). Cargo business performance forecast is to remain robust through the fourth quarter with holiday and year-end peak demand, and continued supply imbalance. The airline will continue to operate its cargo-only passenger flights to maximise aircraft utilisation and increase air cargo capacity. The airline will also secure alternative airports, and recruit additional ground handling contractors to sustain its profitable operation.
Korean Air expects passenger demand to remain weak in the fourth quarter. However, with more countries reopening up their borders, prospects of increased passenger demand are more likely. The airline plans to flexibly operate and gradually expand its regular and charter flights to destinations that do not require quarantine upon arrival such as Hawaii, Guam, Chiang Mai and Spain.
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