BOOKMARK
  • Korean|
  • Chinese|
  • Japanese|
  • Vietnamese
본문내용 바로가기

Aju Business Daily

SEARCH
  • ECONOMY
  • ENTERTAINMENT
  • IT
  • South Korea
  • North Korea
  • WORLD
  • SPORTS
  • LIFESTYLE
  • AUTO MOTIVE
  • OPINION
  • PEOPLE
  • MILITARY
Home > Industry > article

Jeju Air agrees to acquire minor budget carrier after failed bid for Asiana

Lim Chang-won Reporter(cwlim34@ajunews.com) | Posted : December 18, 2019, 15:42 | Updated : December 18, 2019, 16:27
  • 트위터
  • 페이스북
  • 웨이보

[Courtesy of Jeju Air]

SEOUL -- South Korea's top budget carrier, Jeju Air, agreed to acquire a controlling stake in a troubled minor player in the low-cost carrier market, nearly one month after its failed bid for Asiana Airlines, the country's second-largest flag carrier.

Jeju Air said on Wednesday that it signed a memorandum of understanding to acquires a 51.17 percent stake worth 69.5 billion won ($59.6 million) from Eastar Holdings, the largest shareholder of Eastar Jet, and management rights. A share purchase agreement will be signed on December 31 and Jeju Air's due diligence will be conducted from December 26 through January 9.

"Through the acquisition of Eastar Jet, we plan to consolidate our top LCC position by expanding passenger occupancy and maximizing the operational efficiency of the LCC business model," Jeju Air CEO Lee Seok-joo said. Jeju Air, based on the southern resort island of Jeju and controlled by Aekyung, has made an aggressive investment to increase the size of its fleet and air routes.

Aekyung, a mid-sized business group, has formed a consortium to acquire Asiana, but a consortium led by HDC Hyundai Development, a comprehensive construction company, was selected as preferred bidder on November 12.

Eastar Holdings said it would jointly run Eastar Jet as its second-largest shareholder to overcome the current crisis caused by competition, a price war and a business slump that worsened due to a boycott of travels to Japan over a trade war. The small budget carrier has formed an emergency task force to cut costs.

Jeju Air has 45 Boing 737s and Eastar Jet operates 23 Boeing 737s flying to 14 destinations in eight countries.

In South Korea's saturated aviation market, there are two full-service airlines, Korean Air and Asiana, and six low-cost carriers -- Jeju Air, Jin Air, T’way Air, Air Busan, Eastar Jet and Air Seoul. Budget carriers transported 29.2 percent of passengers on international routes last year

Lee said in March that South Korea's low-cost carrier market would see a drop in profitability due to the entry of three more budget carriers -- Air Premia, Fly Gangwon and Aero K, which were licensed this year to launch services. "Travel demand is still growing, but supply is expanding at a tremendous pace, and competition is growing," he said, expressing short-term concerns about profitability problems caused by competition.

 

  • Lim Chang-won Reporter
  • email : cwlim34@ajunews.com
© Aju Business Daily & www.ajunews.com Copyright: All materials on this site may not be reproduced, distributed, transmitted, displayed, published or broadcast without the authorization from the Aju News Corporation.
  • twitter
  • facebook
  • weibo
  • link copy
  • LIST
  • TOP

Related news

  • .Asiana Airlines and Jeju Air to begin international non-landing scenic flight services in December.
    Asiana Airlines and Jeju Air to begin international non-land…
  • .Masks compulsory for passengers using Korean Airs domestic flights.
    Masks compulsory for passengers using Korean Air's domestic …
  • .HDC wants renegotiation on terms of deal to acquire debt-stricken Asiana.
    HDC wants renegotiation on terms of deal to acquire debt-str…
  • .Korean Air suspends or reduces regular flights to Chinese cities.
    Korean Air suspends or reduces regular flights to Chinese ci…
  • .Budget carriers demand emergency bailout to help overcome crisis .
    Budget carriers demand emergency bailout to help overcome cr…

Real Time Photo News

  • .S. Korea to build state-run K-pop concert hall for unaffordable online performances .

    S. Korea to build state-run K-pop concert hall for unaffordable online performances

  • .BLACKPINK member Rosé to release solo album in March.

    BLACKPINK member Rosé to release solo album in March

  • .BTS agency posts record earnings in 2020 on brisk online activities and album sales .

    BTS agency posts record earnings in 2020 on brisk online activities and album sales

  • .[FOCUS] BTS agency leagues with Universal Music to launch new K-pop band in US music scene.

    [FOCUS] BTS agency leagues with Universal Music to launch new K-pop band in US music scene

  • .CJ ENM aims to become major visual content producer thru partnership with Epic Games .

    CJ ENM aims to become major visual content producer thru partnership with Epic Games

Latest News

more+

  • S. Korea to build state-run K-pop concert hall for unaffordable online performances
  • Busan to set up barrier-free public transportation environments for disabled
  • Hyundai auto group forges hydrogen alliance with SK Group
  • Scuba diving in Cebu cited as most viewed content in LG Uplus VR platform
  • SKT uses VR platform to hold non-face-to-face entrance ceremony for university freshmen
Aju Business Daily
  • ABOUT US
  • CONTACT US
  • PRIVACY STATEMENT
  • Copyright Policy

Address : Aju News Corporation LEEMA Building, 11th floor, 42, Jong-ro 1-gil, Jongno-gu, Seoul.    Mail : swatchsjp@ajunews.com

Copyright ⓒ 2016 By Ajunews Corporation, All Rights Reserved.

Mobile view