 |
An Air Busan aircraft is seen in this file photo. (Photo: Air Busan) |
[Alpha Biz= Kim Jisun] SEOUL, June 16 — Asiana Airlines has increased its stake in Air Busan to 58%, signaling the start of full-scale integration efforts ahead of a planned mega low-cost carrier (LCC) merger involving Jin Air, Air Busan and Air Seoul.
Asiana Airlines announced on June 15 that it has decided to exercise its conversion rights on 100 billion won ($75 million) worth of perpetual convertible bonds issued by Air Busan, which it acquired in May last year to support the carrier’s financial restructuring.
Following the conversion, Asiana’s ownership in Air Busan will increase from 41.89% to 58.40%, significantly strengthening its control.
The move reflects both an investment strategy anticipating a future increase in Air Busan’s corporate value and a proactive effort to secure financial stability amid ongoing emergency management conditions, ensuring a smooth and timely integration process.
Air Busan has achieved a turnaround in performance since 2023, posting strong operating results and profitability compared to peers. However, the market generally views the airline as undervalued.
Industry observers expect that, following the planned LCC integration in the first quarter of 2027, synergies from procurement optimization, resource efficiency, and improved utilization rates will drive both revenue growth and cost savings, ultimately enhancing corporate value.
The decision also comes at a time when LCCs are facing mounting challenges from prolonged geopolitical tensions in the Middle East, which have driven up oil prices and foreign exchange rates. Asiana’s conversion is expected to ease Air Busan’s annual interest burden — estimated at around 6 billion won — and eliminate potential step-up interest costs, fundamentally improving the carrier’s capital structure.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
