Korean Air CEO expects US to approve Asiana merger by October

Korean Air Chairman and CEO Walter Cho (Korean Air)

Korean Air Chairman and CEO Walter Cho said Sunday that he expects US approval of the planned merger with Asiana Airlines to come by the end of October.

“We expect full approval by the end of October this year,” Cho said in an interview with Bloomberg in Dubai, Sunday. He stressed “no further concessions,” saying “We have done everything the US and EU have requested us to do.”

His comments come as the US is the last of 14 jurisdictions in which Korean Air needs to secure approval for the merger with its smaller rival. This year, Korean Air received approvals from competition authorities in the EU and Japan in February and January, respectively, leaving the US the only country yet to respond to Korean Air’s three years of efforts to obtain regulatory approval overseas.

Despite the delay in the merger process, Cho said he believes the merger will still be beneficial. “It will bring many more benefits to our customers,” as well as to Korean Air and Asiana Airlines.

In line with the Asiana Airlines merger, Korean Air is currently weighing prospects for the merger of three low-cost carriers here, including subsidiary Jin Air with Asiana Airlines’ Air Busan and Air Seoul. The merger will leave the merged entity with a combined fleet of 64 aircraft.

Besides the merger issue, Cho also commented on Korean Air’s planned purchase of more aircraft.

“Korean Air is planning to buy up to 30 new jets, possibly from Boeing or Airbus,” he said. “We are still considering buying more wide-body aircraft since a lot of our planes have to be replaced soon.”

On the shopping list included Boeing’s 787 Dreamliner and additional A350s. The company’s decision is expected to be made at the Farnborough Airshow, slated to kick off in July in the UK.

Cho said the company is also considering adding more cargo aircraft, but passenger aircraft are being prioritized at the moment, Cho added.

According to Korean Air, the company is currently ordering new aircraft. Korean Air ordered 33 A350s in March this year and 20 A321neos last year, which brought its total order backlog to 50 single-aisle jets.

In terms of its outlook, Cho noted the company’s profitability has remained high recently, thanks to the company’s cargo business, and he is confident that profitability will remain high down the road.

By Shim Woo-hyun ([email protected])