Will Asiana sell long-haul business to Korean Air?

With major creditors of Asiana Airlines failing to find a potential buyer for the cash-strapped carrier, a feasible scenario is emerging that the Korea Development Bank (KDB) will let Korean Air handle Asiana's long-haul business, industry sources said Friday. The timely sales of the nation's second-largest carrier comes as a top priority for the main creditor, which recently signed a consultation contract with two management consultancies ― EY Hanyoung and Bain & Company. But for the creditor and Asiana, there are only a few limited options to choose from to ensure a rapid normalization of the airline's business as its financial soundness deteriorates. The creditors ― led by the KDB ― decided to provide 2.4t won to Asiana as part of an emergency loan to prevent the firm falling into a prolonged capital impairment, which may result in possible delisting from the local stock market. Industry watchers believe it will be very tough for Asiana to find a buyer at least until the end of this year due to the aviation industry's dismal outlook for recovery from the COVID-19 pandemic. Therefore, the creditors are considering selling parts of the firm's major businesses ― such as its license to operate a long-distance route ― to Korean Air, the largest carrier that is showing signs of bouncing back from the virus shock. The company is the only airline here to have reported an operating profit ― 7.6 billion won ― during Q3. "This is one of the feasible scenarios that the Asiana creditors consider when few companies are showing interest in purchasing a controlling stake in the airline," an industry source said.<br/>