Shares of Asiana Airlines, one of South Korea's major airlines, experienced a significant surge, rising as much as 24% on Monday. This substantial increase was driven by expectations that a proposed merger with Korean Air Lines would proceed. The board members of both airlines convened to decide whether to sell off Asiana Airlines' cargo service. If approved, this move might help South Korea's largest carrier, Korean Air Lines, to win European Union antitrust approval for acquiring Asiana Airlines.
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Asiana Airlines had previously announced on Friday that it would hold a board meeting on Monday to discuss whether to accept Korean Air's proposal to the EU. Reuters reported earlier that Korean Air would offer to sell Asiana's air cargo business and divest routes to four EU cities. The surge in shares also affected other stocks related to the merger. The Kospi-listed Asiana Airlines rose 13.8 percent while Korean Air Lines edged up 0.56 percent and the preferred stock of Korean Air up 6.5 percent.
The decision to sell the cargo business could directly influence the European antitrust regulators' decision to permit a merger between the companies. Korean Air plans to put together an agenda for selling Asiana's cargo business and detailed measures to maintain employment levels during a board meeting.
This potential merger comes at a time when the aviation industry worldwide is grappling with the impacts of the COVID-19 pandemic. If successful, this merger could reshape the aviation landscape in South Korea and potentially have broader implications for the global aviation market.
