(LEAD) S. Korea approves merger between budget carriers
(ATTN: ADDS details in last 5 paras)
SEJONG/SEOUL, April 23 (Yonhap) -- South Korea's antitrust regulator said Thursday it approved a deal by Jeju Air Co., the nation's largest budget carrier, to buy smaller rival Eastar Jet Co., as the airline industry scrambles to survive over plunging demand caused by the coronavirus pandemic.
Jeju Air signed the deal to buy a 51.17 percent stake in Eastar Jet from Eastar Holdings for 54.5 billion won (US$45 million) in March as part of its expansion strategy.
In a statement, the Fair Trade Commission said it approved the deal by applying an exceptional clause of the antitrust law because Eastar Jet will not survive unless it is acquired by Jeju Air.
Eastar Jet, which reported an operating loss of 79.3 billion won last year, has been suffering capital erosion since 2013.
Jeju Air has said the acquisition will help it gain a bigger market share and strengthen the company's competitiveness in global markets.
South Korea has two full-service carriers -- Korean Air and Asiana Airlines Inc. -- and seven low-cost carriers (LCCs) -- Jeju Air, Jin Air Co., Air Busan Co., Air Seoul Inc., Eastar Jet, T'way and Fly Gangwon.
Two more LCCs -- Air Premia Co. and Aero K Airlines Co. -- are expected to join the market next year, bringing the country's total number of LCCs to nine.
In February, the government announced it would inject 300 billion won to help LCCs stay afloat.
AK Holdings Inc., the holding firm of South Korean retail conglomerate Aekyung Group, holds a 59.93 percent stake in Jeju Air.
Hit by the new coronavirus, the local airline sector has been reeling from a sharp decline in sales amid lower demand.
As for full-service carriers, the Korea Development Bank (KDB) and the Export-Import Bank of Korea (Exim Bank) said Tuesday that they will inject 1.7 trillion won into Asiana Airlines.
The government is expected to release its financial support programs for Korean Air on Friday.
(END)
-
S. Korea to resume issuing short-term travel visas, e-visas next month
-
Ateez to drop new Japanese EP next week
-
(2nd LD) N. Korea still unresponsive to S. Korea's outreach for talks on COVID-19: official
-
(LEAD) At least 8 injured in S-Oil refinery explosion in Ulsan: firefighters
-
Hyundai Motor to invest US$5 bln in U.S. for robotics, autonomous driving development
-
S. Korea to resume issuing short-term travel visas, e-visas next month
-
(5th LD) Yoon, Biden agree to expand joint military exercises to cope with N.K. threats
-
(LEAD) Yoon, PPP lawmakers travel to Gwangju en masse to commemorate 1980 democracy uprising
-
(LEAD) At least 8 injured in S-Oil refinery explosion in Ulsan: firefighters
-
(LEAD) Biden set to arrive in S. Korea for first summit with Yoon
-
Military develops new helmet capable of stopping stronger pistol rounds
-
Agencies remain silent as V of BTS, BLACKPINK's Jennie rumored to be dating
-
Biden says he and Yoon 'married up'
-
With historic Golden Boot, Son Heung-min cements case as greatest S. Korean footballer ever
-
S. Korea to expeditiously push for 'normalization' of U.S. THAAD unit operation: defense chief