Korean Air said it has finalized the post merger integration (PMI) plan to integrate Asiana Airlines afterreceiving confirmation from the Korea Development Bank.

In November 2020, Korean Air signed a deal to acquire Asiana’s new shares and perpetual convertible bonds. After the contract, Korean Air thoroughly conducted due diligence and created the post merger integration (PMI) plan, which it submitted to the Korea Development Bank on March 17.

For three months, the state-owned bank reviewed the PMI plan and made revisions in consultation with Korean Air, the Ministry of Land, Infrastructure and Transport, and other relevant agencies. 

Korean Air said the finalized PMI plan includes integration plans for the airlines’ full service carriers (FSCs) and low cost carriers (LCCs); measures to resolve restrictions of holding companies stipulated in the Fair Trade Act; employment retention and succession of collective agreements; and plans to effectively reorganize relevant subsidiaries.

"Following the finalization of the PMI plan, Korean Air will proceed to integrate with Asiana after receiving business combination approvals from relevant authorities. Due to complicated issues involving legal, financial, and tax risks, the actual implementation will reflect various market regulations and conditions," the South Korean carrier said in a statement.

It added that the newly integrated global airline will increase operational efficiency of overlapping passenger and cargo routes, while diversifying its schedules and expanding opportunities for new routes, which will increase customer benefits and create integrated synergy by reducing costs.

Moreover, it added that the integrated FSC and LCC are expected to improve efficiency by achieving economies of scale, and will act as an opportunity for the growth of relevant contractors, partners and other companies in the aviation industry. 

"Korean Air will continue to proactively take necessary steps to make sure the PMI plan is being carried out properly, and the implementation progress will be regularly inspected by the management evaluation committee, which has been established in agreement with the Korea Development Bank," Korean Air said.