The merger between Korean Air and Asiana Airlines entered the final stage after 4 years of judgment and adjustment after Korean Air announced its acquisition of Asiana Airlines in November 2020. On December 12, 2024, Korean Air officially incorporated Asiana Airlines as a subsidiary, which means a major change in Korea’s aviation industry. Accordingly, Pharos would like to investigate the reason for and process of the merger, the effects it will have on passengers, and various economic situations and prospects that will show.

 First, let’s find out the reason for the merger between Korean Air and Asiana Airlines. They pushed mergers to realize economies of scale in airline, and to strengthen their competitiveness in the global aviation market. Also, Asiana Airlines’ financial situation worsened before COVID-19, and it was facing a mass debt and crisis. To solve this problem, Kumho Asiana Group, which was a major shareholder promoted the sale of Asiana Airlines, and the government and the Korea Development Bank were able to solve Asiana Airlines’ financial crisis by Korean Air’s acquisition of Asiana Airlines. After Hanjin Kal and Korean Air raised the needed funds and acquired a stake in Asiana Airlines, the two airlines began preparing to merge. Since this process required approval from several countries’ competition authorities, the merger was finally approved by 14 countries, including the United States, Japan, China, and the EU.

 Next is the effect on passengers using the two airlines. First, about 2 years after the merger, the two airlines began to gradually establish an integrated strategy as they operated independently and proceeded with the final merger in 2026. First, the long- distance routes will be strengthened and flights will be diversified. It can increase Korean Air’s position in the aviation alliance and improve its bargaining power with competitors. Next is the change in ticket prices. As the merger of the two airlines reduces the number of competitors in the domestic and international markets, there is a concern about an increase in ticket prices. Lastly, the part that attracts the most attention is frequent flyer mileage. Generally, methods of integrating mileage include integrating membership accounts, adding mileage according to conversion ratio, and integrating into a new membership system.

 The final section discusses various economic situations and prospects that may arise from the merger of the two airlines. In the short term, restructuring costs incurred in the merger process, reorganization of duplicate assets, and measures for regulatory compliance can weigh on corporate profitability. In the mid-to-long term, various industries such as tourism and distribution linked to the aviation industry will be activated and will naturally contribute to the national economy. However, the negative outlook cannot be ignored, the merger effect may be limited due to external factors such as the consumer burden caused by rising ticket prices, the downturn in the global economy, and exchange rate fluctuations.

 In conclusion, the merger of Korean Air and Asiana Airlines is expected to bring significant changes in the Korean economy and the aviation industry, and if it is successful, it is likely to have a positive impact in the long term. However, the short-term adjustment costs and monopoly issues require careful management and countermeasures. The merger of the two airlines is an important event that opens a new horizon for the domestic aviation industry. In addition to strengthening the global competitiveness of the integrated airline, it is necessary to improve service and prepare measures to prevent monopoly in consideration of consumer benefits. Through this, the domestic aviation industry should pursue sustainable development and consumer satisfaction.

Editor-in-Chief ⦁ CHO SEO YUN ⦁ jeoyum@gmail.com