Korean Air vows no layoffs despite Asiana takeover

Korean Air’s president has said there would be no layoffs as a result of its takeover of Asiana Airlines.

Woo Kee-hong, the airline’s president, said during a press briefing on Wednesday that most staff at both airlines would stay despite the takeover as Korean Air had “no plans to reduce supply.”

His remarks come one day after a court ruling cleared the first legal hurdle for the acquisition. The share price of Asiana, which had been on the rise since the announcement of the Korean Air takeover, went up in the wake of the decision Tuesday.

Some 28,000 staff members work at South Korea’s two national flag carriers, with 90 percent to 95 percent directly employed, the airline’s president said.

With the acquisition process already underway with a team of experts at the company, Korean Air is scheduled to seek a review by authorities in foreign countries by mid-January and is on track to draw up a comprehensive plan by March 17.

Woo also revealed plans for a mega international low-cost carrier combining three existing budget airlines -- Jin Air, Air Seoul and Air Busan -- which would be operated by a separate corporation and administrators.

The airline’s president said there would be synergy with the new budget airline in terms of profit and flight schedules, similar to the synergy from the Asiana-Korean Air deal.

When asked about the challenges from the three-way alliance led by private equity fund Korea Corporate Governance Improvement, the airline CEO’s sister Cho Hyun-ah and Bando Engineering & Construction, Woo said Korean Air would continue the acquisition process despite possible legal battles ahead.

By Yim Hyun-su (hyunsu@heraldcorp.com)