Korean Air, South Korea’s largest airline is reportedly selling its inflight catering and duty-free shopping businesses to Hahn & Company, Korea’s second largest private equity firm. The www.koreaninvestors.com website reported that if concluded, the transaction will rake in as much $840 million. According to the report, the airline’s July 7th Board Meeting had already granted exclusive negotiations rights to the private equity firm.
Korean Air which in recent months had dangled some of its business units for sale, notably its mileage program and maintenance operations, may continue to pursue similar opportunities in an effort to improve its liquidity.
The sale of the in-flight catering and duty-free businesses seems to have been a obvious choice as the unit was under a single ownership structure with the Hanjin Group, the airline’s parent company. It was estimated that the sale of the carrier’s three core businesses — in-flight meal service, mileage program and maintenance operations — could total as much as 3 trillion won ($2.4 billion).