Korean Air to buy Asiana – Asiana to leave Star Alliance?

In the first major airline merger since covid appeared, Korean Air has announced a deal to buy its South Korean rival Asiana Airlines.

Subject to regulatory approvals, which are expected to take almost a year, the new combined group – to be known as Korean Air – will be one of the 10 largest global airlines.

Korean needs to raise the money to make the deal happen – it doesn’t have enough cash on hand – so a lot could still derail the transaction. Very few countries are big enough to support more than one full service airline, however, so this is arguably a natural act of consolidation.

Korean Air is a member of the SkyTeam airline alliance. Delta Air Lines of the US, the pivotal member of SkyTeam, is also a minority shareholder in Korean.

Given that Korean is leading this transaction and it is their brand which remains, it is hard to see a scenario under which Asiana remains in Star Alliance beyond 2021.

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