Expectations grow over sale of Air Busan to city firm

Busan’s business community began to pin high hopes on the sale of Air Busan from Asiana Airlines to a company in the city, as the Korea Development Bank (KDB) became more open-minded toward the proposal, according to industry officials, Thursday. The state-run bank is the main creditor of Asiana, which is the largest shareholder of the Busan-based budget carrier. The bank had initially agreed to Korean Air’s plan to merge Air Busan with Jin Air and Air Seoul, once the full-service carrier finishes acquiring Asiana. Amid the European antitrust regulator’s reluctance to allow Korea’s largest air carrier to acquire the second-largest, however, Busan’s business community and politicians have called for the sale of Air Busan to a local company. Earlier this week, they decided to organize a task force to help Air Busan’s second-largest shareholder, Dong Il, acquire the air carrier in partnership with other shareholders. Busan’s civic groups also urged KDB to allow the sale of Air Busan to a local company, citing the air carrier’s diminishing competitiveness amid the slow progress of Korean Air’s takeover of Asiana. They emphasized that Air Busan should serve as an air carrier based out of a new airport that will open on Gadeok Island in Busan by 2029. In response, KDB Chairman Kang Seog-hoon said Tuesday that the bank may talk about the sale of Air Busan to a local company, if the European Union finishes its review of the Korean Air-Asiana deal in January, according to Busan Metropolitan City and the Busan Chamber of Commerce and Industry. Busan expects KDB to allow Air Busan to spin off from Asiana, even if the EU rejects the deal. The European Commission has yet to resume its review on deciding whether to give its approval, despite the fact that Korean Air submitted remedial measures against competition concerns two weeks ago. The Korean firm told the commission on Nov. 2 that Asiana will sell its cargo business.<br/>