SEOUL, Korean Air Co., South Korea’s largest carrier by sales, said Monday it has selected cargo-focused Air Incheon Co. as the preferred bidder for the sale of Asiana Airlines Inc.’s cargo business.

The national flag carrier made the decision at a board of directors meeting Monday.

Korean Air is in the process of acquiring Asiana, and it has so far obtained approval from 13 countries and regions for the acquisition, with the final one yet to come from the United States to complete the merger plan.

In February, the company conditionally won approval for the merger from the European Commission (EC). The sale of Asiana’s cargo division is part of conditions set by the European Union’s antitrust regulator due to competition concerns involving the merger.

Korean Air picked Air Incheon based on three key factors: the certainty of completing the transaction, the ability to strengthen long-term competitiveness of the air cargo business and the capability to mobilize funds through a competent consortium, the com
pany said in a statement.

Air Incheon, founded in 2012 and the country’s sole cargo-only carrier, is expected to enhance its competitiveness by utilizing Asiana’s long-haul network to the Americas and Europe, and its fleet of larger cargo aircraft, it said.

Korean Air plans to sign a “framework agreement” with Air Incheon in July after consulting on the contract terms. The agreement is subject to a review by the EC.

Source: Yonhap News Agency