(Corrects paragraph 6 to reflect that Incheon Airlines plans to sell space directly to logistics companies.)
By Lisa Barrington
SEOUL (Reuters) – Air Incheon, set to become South Korea’s second-largest cargo carrier once it completes a deal to buy Asiana Airlines’ cargo unit, will consider buying Boeing and Airbus freighters to upgrade its wide-body fleet, its chief executive said.
The European Union’s competition regulator last month approved Incheon Airlines, a small cargo carrier that owns four Boeing 737s, as the preferred bidder for Asiana’s cargo business, as a condition for approving its merger with Korean Air.
Under the undisclosed deal, Asiana’s fleet, employees, customers and air traffic rights will be transferred to Air Incheon, which is based at Incheon Airport, South Korea’s main international gateway and the world’s fifth-busiest cargo airport. Asiana operates 11 Boeing 767 and 747 freighters to 25 cities in 12 countries.
The acquisition will include flying rights to major Chinese export hubs such as Shanghai, Guangzhou and Hong Kong, and to the United States, Air Incheon Chief Executive Stanley Sung-Hwan Lee told Reuters in an interview this week.
He added that the aim is to grow to become a global provider of wet leasing and rental as well as selling spaces directly to logistics companies.
Lee plans to gradually upgrade Asiana’s wide-body fleet, a task complicated by a global shortage of aircraft and a delay in U.S. approval to convert Boeing 777-300ERs from passenger to freighter aircraft.
“Incheon Airlines is capable of operating the current Asiana fleet for at least five or seven years,” he added.
He is talking to lessors and manufacturers about converting Boeing 777-300ERs, Boeing 777 freighters, or Airbus A350 freighters, which the European planemaker expects to enter service in 2026.
The Asiana Pilots Union (APU) said it was unhappy with Incheon Air being chosen as a preferred competitor, saying it was too small to compete with Korean Air.
The airline pilots’ union, which also opposes Korean Air’s purchase of Asiana, said more than 100 Asiana cargo pilots had submitted letters as of Thursday indicating they would resign if transferred.
He told me that Incheon Airlines needs the cooperation and expertise of Asiana employees and will guarantee the same salary and similar benefits.
Korean Air has received the green light from 13 of 14 competing bodies to complete the Asiana deal, and CEO Walter Cho said he expects a final U.S. decision by the end of October.
