Air Incheon to consider widebody freighter orders after Asiana cargo purchase

(Corrects paragraph 6 to reflect Air Incheon does plan to sell space directly to logistics firms)

By Lisa Barrington

SEOUL (Reuters) -Air Incheon, set to become South Korea’s second-biggest freight carrier once a deal to buy Asiana Airlines’ cargo unit is finalised, will consider both Boeing (NYSE:) and Airbus freighters to refresh the widebody fleet, its CEO said.

The EU competition regulator last month approved Air Incheon, a small cargo-only carrier with four Boeing 737s, as the preferred bidder to buy Asiana’s cargo business, as a condition of approval for it to merge with Korean Air Lines.

The purchase for an undisclosed sum would transfer Asiana’s fleet, staff, customers and traffic rights to Air Incheon, which is based at Incheon airport, South Korea’s main international gateway and the world’s fifth-busiest cargo airport. Asiana operates 11 Boeing 767 and 747 freighters to 25 cities in 12 countries.

The acquisition will include the rights to fly to major Chinese export hubs like Shanghai, Guangzhou and Hong Kong, and to the U.S., Air Incheon CEO Stanley Seunghwan Lee told Reuters in an interview this week.

The aim is to grow into a global charter and wet-lease provider alongside selling space directly to logistics firms, he added.

Lee plans to gradually update Asiana’s ageing widebody fleet, a task complicated by a global aircraft shortage and delayed U.S. approval for Boeing 777-300ER passenger-to-freighter conversions.

“Air Incheon can operate the current Asiana fleet at least five or seven years,” he said.

Lee is talking to lessors and manufacturers about converted Boeing 777-300ERs, Boeing 777 factory freighters, or Airbus A350 freighters, which the European planemaker expects to enter service in 2026.

The Asiana Pilot Union (APU) has said it is unhappy with Air Incheon as preferred bidder, saying it is too small to compete with Korean Air.

The APU, which also opposes Korean Air buying Asiana, said more than 100 Asiana cargo pilots had, as of Thursday, submitted letters indicating they will resign if transferred. 

Lee said Air Incheon needs the cooperation and experience of Asiana staff and will guarantee the same salary and similar benefits.

Korean Air had obtained a green light from 13 of 14 competition authorities for the Asiana deal and CEO Walter Cho has said he anticipates the final U.S. decision by the end of October.