Jin Air, Air Seoul, Air Busan cleared to merge; unified LCC to launch in March

South Korea's Ministry of Land, Infrastructure and Transport approved the merger of Jin Air, Air Seoul and Air Busan on Thursday, with conditions requiring the carriers to establish a flight safety management system and fulfill consumer protection commitments. The ministry also said it would monitor the integration process to ensure passengers face no disruption when the unified carrier launches in March.

With the approval, the three low-cost carriers — Jin Air, a subsidiary of Korean Air, and Air Seoul and Air Busan, subsidiaries of Asiana Airlines — are set to begin operating as a single LCC on March 17. The merger follows the planned launch of a combined full-service carrier under Korean Air on Dec. 17.

A full-service carrier provides comprehensive in-flight services such as meals and baggage handling, while an LCC minimizes or charges separately for such services to keep fares low.

The Korea Fair Trade Commission also approved the merger filing. All three carriers are affiliates of Hanjin Group, and under corporate combination review standards, a merger among affiliates within the same group is presumed not to restrict competition.

The ministry applied licensing criteria set out under the Aviation Business Act and verified relevant legal requirements through in-depth consultation with a merger advisory panel, as well as expert reviews by the Korea Transport Institute and an accounting firm. The advisory panel comprised specialists in aviation, consumer affairs, employment, law and accounting.

The review found no disqualifying factors — such as effective foreign control of the company or foreign nationals serving as registered executives — and confirmed that the merger met approval requirements covering capital adequacy, financial capacity and the soundness of the business plan. The ministry granted final approval after a licensing advisory meeting.

As conditions of approval, the ministry required the merged LCC to complete a safety management system change inspection and obtain all necessary approvals from foreign aviation authorities before its launch date, and to report monthly to the ministry on the implementation of its submitted plans, including consumer protection measures.

Jin Air also submitted a plan to develop Busan as a second hub, including expanding its Busan-based route network and infrastructure. Key proposals include increasing international routes at Gimhae Airport from 28 to 33 and raising weekly flights from 281 to 339.

The ministry said it expects Jin Air's second-hub plan to contribute to revitalizing regional airports and pledged to monitor its implementation closely. It also recommended that Korean Air and Jin Air communicate closely with Busan city and local communities — given Air Busan's importance to the region — and commit fully to developing Busan as a second hub.

Park Jun-sang, director of the ministry's aviation industry division, said the ministry would "strictly oversee the integration of the Korean Air group's full-service and low-cost carriers to ensure no safety issues arise and that passenger convenience is not diminished." He also urged Jin Air, as the country's largest LCC, to "strengthen its competitiveness in the international aviation market while improving air travel convenience for the public."

Meanwhile, the ministry said it plans to explore ways to strengthen the competitiveness of other LCCs and foster a competitive environment among carriers, given that the Korean Air group's overall scale will grow following both the full-service and low-cost carrier mergers.