Korean Air is moving forward with plans to unify its low-cost carriers following its merger with Asiana Airlines. The airline intends to merge its Jin Air with Asiana’s Air Seoul and Air Busan under a consolidated Jin Air brand. However, strong local opposition in Busan over the absorption of Air Busan is likely to create hurdles.
According to industry sources on Jan. 10, Air Busan will hold an extraordinary shareholders’ meeting on Jan. 16 to appoint Korean Air executives to its board of directors. The agenda includes appointing Jeong Byeong-seop, executive director of passenger sales at Korean Air, and Song Myung-ik, head of Korean Air’s merger task force, as internal directors, and Seo Sang-hoon, Korean Air’s financial controller, as a non-executive director. Air Busan’s board consisted of two internal directors, two external directors, three non-executive directors, and one executive director by last September.
Korean Air has reportedly decided to consolidate Jin Air, Air Seoul, and Air Busan under the Jin Air brand, with Incheon International Airport as its hub. The merged Jin Air is expected to become the largest low-cost carrier in South Korea, with a fleet of 58 aircraft.
The main challenge lies in the strong opposition from Busan Metropolitan City and local stakeholders. Unlike Jin Air and Air Seoul, which are wholly owned by Korean Air and Asiana respectively, Air Busan’s largest shareholder, Asiana, holds a 41.89% stake. Around 16% of Air Busan is owned by Busan City and local companies. Air Busan has been closely tied to the region since its establishment in 2008, with local companies investing in its founding and Busan City injecting 10 billion won in 2022 to stabilize finances during the COVID-19 pandemic.
The local community fears losing its regional flagship carrier, which is seen as essential for the growth of the planned Gadeok Island New Airport, set to open in 2029. Without Air Busan, regional economic revitalization could be hindered. Some civic groups are advocating for alternatives, such as selling Air Busan separately or establishing an independent airline.
Busan City plans to propose relocating the integrated Jin Air headquarters to Busan as a compromise. Mayor Park Heong-jun recently said in an interview that, “After examining various options to maintain a regional carrier, relocating the integrated LCC headquarters to Busan seems the most realistic alternative.” While Park mentioned plans to engage with key decision-makers after completing practical talks with Korean Air, the airline declined to comment on the negotiation process.
Industry experts are skeptical about proposals such as relocating the unified LCC headquarters to Busan or selling off Air Busan due to operational efficiency concerns. The Ministry of Land, Infrastructure, and Transport said last November that the headquarters location should be decided independently by the private company, based on business conditions. An industry source explained, “Air Busan has profitable routes from Busan and has returned to profitability since 2023, so it is unlikely that Korean Air would abandon its stake.”
