December 1st 2024

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DECEMBER

Mid-month Korean Air (KAL) achieved its goal of acquiring Asiana Airlines when it secured equity of 63.88% in South Korea’s second international carrier. Read More » KAL acquired 131,578,947 newly issued shares of Asiana Airlines representing a 63.88% ownership stake and transforming Asiana into a KAL subsidiary. KAL said the integration will proceed without workforce restructuring. “The combined organisation projects natural staff growth through business expansion with employees in overlapping functions being reassigned within the organisation,” a KAL statement said.

On the same day, four board members of Australia’s Rex Airlines were served notice that the Australian Securities and Investments Commission (ASIC) had alleged former executive chair, Lim Kai Hai, had made a statement to Australian Securities Exchange about the positive forward guidance of the domestic carrier that had no reasonable basis to the claim. The matter is to be heard before the NSW Supreme Court at a date to be determined.

By year end, a key emerging trend was the increasing willingness of airlines to establish alliances, code-shares and other forms of cooperation.

This was particularly the case with oneworld alliance member, full-service Japan Airlines (JAL), which commenced code-sharing with India LCC IndiGo.

The code-share follows JAL’s announced joint venture (JV) with Garuda Indonesia that is expected to commence next April. The JV is JAL’s first with an airline that is not a oneworld alliance member.

Other airlines casting a wide net to expand their networks include Vietnam Airlines (SkyTeam) with United Arab Emirates based Emirates Airline and Etihad Airways, Malaysia Airlines (oneworld) with IndiGo, Qatar Airways (oneworld) deepening its partnership with Virgin Australia (unaligned) and with plans to acquire 25% of the Australian airline.

Singapore Airlines (Star Alliance) is also expanding its codeshare with Garuda into a JV. There are likely to be more examples in the new year.

Also likely to be closely watched in 2025 is the air travel market between China and the U.S., which has been slow to pick up this year.

U.S. airlines in particular have been hesitant to add capacity to the market, which market watchers suggest is explained by the softness of the economy in China, with more Chinese preferring to travel within the country for holidays, and geopolitical tensions, including the inability of U.S. airlines to operate through Russian airspace.

Some encouraging news on this front was the Delta Air Lines announcement it will open nonstop Los Angeles-Shanghai Pudong in June next year. Also United Airlines has filed an application to operate three times a week between Los Angeles and Beijing Capital from May in 2025.