Aero K, a South Korean low-cost airline, has recently expressed its interest in acquiring the cargo division of Asiana Airlines.
According to an Aero K official, they are making preparations to submit a Letter of Intent (LOI) by the 28th of this month. This is being done in consultation with their major shareholder, Daemyung Chemical, which invested 30 billion won ($22.5 million) in Aero K in Aug. 2022.
Aside from Aero K, other airlines such as Eastar Jet, Air Premia, and Air Incheon have also shown interest in purchasing Asiana Airlines’ cargo business. The outline of the acquisition battle is expected to emerge before Feb. 28.
UBS, which is the main financial advisor for the sale of Asiana Airlines’ cargo division, has recently sent letters to potential bidders describing the investment details. The bidders are expected to submit their Letter of Intent (LOI) and due diligence materials to UBS by Feb. 28.
Korean Air is currently in the process of acquiring Asiana Airlines, but in order to gain approval from the European Union (EU) competition authorities, they have been required to sell off Asiana Airlines’ cargo business.
The estimated price for this division is between $376 million and $526 million, which includes all cargo aircraft and other assets. Asiana Airlines currently owns 11 cargo planes, with an average age of 20 to 25 years, which is considered old. The total cost of the acquisition is expected to exceed $752 billion, which includes debt costs the company.
