South Korea’s Air Incheon is preferred bidder for Asiana cargo unit

South Korean budget airline Air Incheon is the preferred bidder to buy Asiana Airlines’ cargo business, Korean Air said on Monday, paving the way for a final go-ahead from the EU competition regulator of a Korean Air-Asiana merger.

Korean Air, South Korea’s biggest carrier, is set to purchase nearly two-thirds of Asiana for about US$1.4 billion, but anti-trust authorities from the European Union stipulated that Asiana’s cargo business must be sold before they will give a full approval.

Air Incheon has priority in negotiations until Jul 15, Korean Air said in a regulatory filing on Monday (Jun 17).

An acquisition of the cargo unit would encompass Asiana’s freighter aircraft, airport slots, employees and contracts, the EU has said.

Asiana operates 11 Boeing 767 and Boeing 747 cargo planes on 21 routes to 25 cities in 12 countries, including the United States, Germany, Italy, Belgium and Britain.

Korean Air has obtained a green light from competition authorities for the Asiana deal in 13 of 14 jurisdictions. It is still awaiting a US decision, which CEO Walter Cho has said he is confident will be completed by the end of the year. REUTERS