Jin Air, Air Busan and Air Seoul to merge into single carrier by March next year

Three boards approve merger, sign agreement

Extraordinary shareholder meetings set for December

Jin Air to absorb assets, liabilities and staff

Jin Air, Air Busan and Air Seoul will merge into a single carrier by March next year. The three low-cost carriers under Hanjin Group plan to consolidate their fleets, routes, personnel and digital platforms around Jin Air to achieve economies of scale and build an integrated aviation network spanning the Greater Seoul area and the Yeongnam region.

The three airlines said Friday that their respective boards met and approved the merger, signing a merger agreement. They plan to hold extraordinary shareholder meetings in December to ratify the deal, then seek regulatory approvals — including a merger license under the Aviation Business Act — before launching the combined carrier, to be called "integrated Jin Air," on March 17, 2027.

The merger will take the form of Jin Air absorbing Air Busan and Air Seoul. Jin Air will assume both companies' assets, liabilities, rights and obligations, as well as their employees and legal standing.

The merger ratio has been set at 0.2862684 Air Busan shares and 0.7501939 Air Seoul shares per one Jin Air share. The merger values for listed companies Jin Air and Air Busan were calculated based on reference market prices under capital markets law, while unlisted Air Seoul was assessed using an intrinsic value method that factors in asset value and earnings potential.

To protect shareholder interests, Jin Air also had an independent external accounting firm review the appropriateness of the merger valuations and calculation methods.

Securing a unified air operator's certificate (AOC) is the central task ahead of the combined carrier's launch. Jin Air plans to gradually consolidate the fleets, flight operations and maintenance infrastructure of Air Busan and Air Seoul based on its existing certificate and operating standards.

The airline aims to pass the Ministry of Land, Infrastructure and Transport's safety operations system change inspection before the planned launch date. Once the domestic safety review is complete, the company will proceed with follow-up steps including approvals and notifications from overseas aviation authorities.

The three carriers have also been preparing for integration across safety, flight operations, maintenance and customer service ahead of the merger. Jin Air invested about 22 billion won ($15.8 million) to introduce an A320neo-series full-flight simulator, building training infrastructure to support a combined fleet that will eventually include Airbus aircraft.

The airlines have developed and launched a joint pilot training program and are working to standardize training systems and manuals across safety, maintenance and cabin service through joint sessions for new maintenance engineers and combined cabin instructor training across all three carriers.

On the customer service front, Jin Air and Air Busan have introduced codeshare flights, extended the window for purchasing and refunding ancillary services, and expanded pre-order in-flight meal options. All three carriers have jointly conducted accessibility training for staff serving passengers with reduced mobility and developed dedicated training materials.

Work on integrating corporate culture is also under way. The three airlines publish a newsletter keeping employees informed about the merger and are broadening interaction among staff through joint sports events and company club activities.

After the merger, the combined carrier plans to restructure routes and flight schedules to match market demand and operate the enlarged fleet with greater flexibility. The aim is to improve connectivity between routes while strengthening the ability to handle irregular situations such as cancellations and delays.

Customer touchpoints for reservations and ticketing will also be unified. The three carriers will consolidate their booking and ticketing systems and mobile platforms into a single interface, integrating the entire customer journey from flight search and reservation through airport check-in to boarding, while progressively standardizing customer service systems and manuals.

Particular emphasis will be placed on linking Incheon-based routes with Busan-based routes to strengthen a network anchored on the Greater Seoul area and the Yeongnam region. The plan calls for redeploying existing routes and flight resources while identifying new routes and untapped demand to boost the competitiveness of international flights departing from regional airports.

"This three-way merger is an important turning point that brings together the expertise each airline has built up to lay a new foundation for growth in South Korea's low-cost carrier industry," a Jin Air official said. "We will complete a successful integration with safety as our top priority, and grow into Asia's leading low-cost carrier by optimizing route operations and expanding consumer choice."

eyre@heraldcorp.com