South Korea’s flag carrier Korean Air has signed a ‘business transfer contract’ with private equity investment group Hahn & Company today (25 August) to sell off its inflight retail and catering units.

The businesses will be transferred to a new corporation which will be established by Hahn & Company.

The KRW990.6 billion/$834 million agreement was confirmed in a release on the Korean Air website. According to the notice, Korean Air plans to acquire a 20% stake in the new corporation to ensure a ‘stable supply’ of inflight meals and duty free products and ensure high-quality service.

SUPPLY CONTRACT IMMINENT

Korean Air is expected to agree a contract with Hahn & Company to supply inflight meals and duty free products before the completion of the transaction in the next two or three months.

The airline said: “Korean Air and Hahn & Company plan to successfully complete the transaction based on this business transfer agreement, while cooperating closely to ensure the stable business operation of the new corporation.”

As reported, the move to sell the airline’s retail and catering businesses was decided during a Korean Air Board of Directors meeting held on (7 July).

During the meeting, Korean Air signed a Memorandum of Understanding granting exclusive rights to Hahn & Company to promote the sale of the inflight retail and catering business. It also went through a detailed due diligence and consultation process.