Korean Air unlikely to accept Busan’s call to spin off Air Busan

Korean Air is expected to reject calls to separate Air Busan ahead of its planned integration with Jin Air, despite strong opposition from the nation's southern port city, as the regional airline is on track to stabilize its earnings, according to industry officials on Friday. The national flag carrier is in the process of merging three low-cost carriers (LCCs) — Jin Air, Air Seoul and Air Busan — after completing its long-awaited acquisition of Asiana Airlines in December. However, the plan faces strong opposition from the city of Busan and regional companies holding a stake in Air Busan. According to a regulatory filing, Asiana is the largest shareholder of Air Busan, with a 41.89% stake in the regional LCC as of the end of 2024. The city government and local firms there also hold a 16% stake combined in Air Busan. This is not the case for Jin Air and Air Seoul, both of which are fully controlled by Korean Air and Asiana Airlines, holding a 100%f stake in each LCC, respectively. The Busan city government and local companies are urging Korean Air to either consider selling Air Busan or relocate the headquarters of the merged LCC to the nation’s second-largest city.<br/>