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Korean Air / Asiana Airlines Merger FAQ

• Korean Air will strengthen the transit competitiveness of Incheon International Airport, and reinforce its position as a key Northeast Asian hub airport. In addition, the company will endeavor to enhance customer benefits by expanding scheduling options and improving safety and service quality, thereby increasing overall customer satisfaction.
• Korean Air aims to enhance the global competitiveness of the Korean aviation industry through shared growth with business partners driven by expanded operational scale, a safety flight operation system aligned with global standards, and premier customer service. Ultimately, the company’s goal is to become Korea’s flagship carrier and the world’s most beloved airline.

• The integration of Korean Air and Asiana will generate diverse synergies by utilizing expanded resources such as networks, air traffic rights, slots, and workforce.
  • Revenue Synergies: Enhance sales competitiveness by optimizing schedules on overlapping routes and developing new destinations to expand customer choices.
  • Cost Synergies: Improve profitability through economies of scale, streamlining fleet/IT operations, and reducing costs through consolidated procurement of fuel and supplies.
• Based on these synergies, Korean Air aims to secure the global competitiveness of the integrated carrier and enhance its long-term corporate value and shareholder value.

• With the unification and enhancement of the safe flight operations system established as a top priority, the integrated Korean Air will provide customers with a more convenient and enriched travel experience based on the operational efficiency and economies of scale secured through the merger.
• Customer flight options will be expanded through the efficient allocation of combined resources. The integrated Korean Air will actively develop new destinations worldwide to provide its distinctive premium service even in cities unreached by Korean carriers, and will strategically distribute flight schedules that were previously concentrated in the same time slots according to the purpose of visit – business, tourism, study – thereby improving the ability for customers to broadly select itineraries that best suit their schedules and manage their time more efficiently.
• The mileage programs will be integrated into SKYPASS, enabling convenient and centralized management under a single program. In addition, the expanded flight network and increased seat capacity will provide greater opportunities to redeem bonus tickets. New elite membership tiers will be introduced to offer differentiated services, and through integrated premium partner companies, customers can earn and use mileage in even more diverse ways in daily life.
• The integrated airline is committed to providing a safer and more comfortable journey by utilizing the safety and operational expertise of both airlines.

• Korean Air is pursuing a merger as the final step toward integrating both companies, following Korean Air's acquisition of Asiana shares on December 12, 2024.
• Operating an airline requires securing tangible and intangible resources such as an Air Operation Certificate (AOC), air traffic rights, and slots based on regulatory approvals from authorities. Under the current structure where both companies maintain independent brands, there are constraints on flexible integration and allocation of these essential resources, making it difficult to fully realize operational synergies from the combination unless integrated operations are achieved through merger.
• Looking at large-scale merger cases between U.S. airlines, all maximized synergies under a single brand system and secured global competitiveness. Specifically, the 2008 Delta-Northwest merger completed as Delta, the 2010 United-Continental merger as United, and the 2013 American-US Airways merger as American Airlines, each successfully completing integration by unifying under a single brand.
• Korean Air aims to secure global competitiveness as a Full Service Carrier(FSC) by integrating the resources of both companies through this merger, and to enhance the corporate value and shareholder value of the integrated airline.

• The key timeline to be pursued following the board resolution approving the merger agreement under the Korean Commercial Code and Financial Investment Services and Capital Markets Act is outlined below, and may be subject to change through consultations with or approvals from relevant authorities or agreement between the contracting parties. For the detailed schedule, please refer to Korean Air's Material Fact Report dated May 13, 2026.
• To finalize the merger, approvals from relevant authorities are required. In Korea, it is necessary to complete aviation-related licensing and reporting procedures in accordance with laws such as the Aviation Business Act and the Aviation Safety Act. This includes securing merger authorization from the Ministry of Land, Infrastructure and Transport (MOLIT) and approval to amend our Operations Specifications (OpSpec). Additionally, necessary approvals must be obtained from overseas aviation authorities.
• As this merger is between a parent company and its subsidiary, business combination filing is not required with the Korean competition authority. In Vietnam, however, a filing is required under the applicable laws and regulations. For other jurisdictions as well, should business combination filings be deemed necessary, Korean Air plans to comply with the applicable laws and regulations of the relevant countries.
• Korean Air is committed to executing all remaining procedures seamlessly through close coordination with regulatory authorities.

• The air transportation industry, the core business of both companies, requires close and seamless integration across various areas, including aircraft operations, maintenance and operational systems. Above all, ensuring the safety of passengers remains our highest priority. Therefore, thorough preparation is essential to achieve a systematic integration that comprehensively considers both efficiency and safety.
• Furthermore, to prevent potential system errors or operational disruptions that may arise at the time of integration and to provide seamless services to passengers, the integration schedule must be carefully planned by reviewing the optimal time for resource allocation and immediate response.
• Accordingly, after incorporating Asiana as a subsidiary on December 12, 2024, and undergoing a stable two-year preparation process, Korean Air has determined that December 2026 is the optimal time for integration.

• As a merger between listed affiliates, the merger price was calculated based on the base stock price in accordance with relevant laws, including the Financial Investment Services and Capital Markets Act(*). The merger ratio was then determined based on this price.
  • Article 165-4 of the Financial Investment Services and Capital Markets Act and Article 176-5 of its Enforcement Decree
• Although an external valuation is not legally required for this merger, both companies voluntarily hired independent accounting firms to review the appropriateness of the merger price and merger ratio. The results confirmed that the merger price and ratio are fair and accurately reflect the actual value of both companies. For more details, please refer to Korean Air's Material Fact Report dated May 13, 2026.
• Total Number of New shares to be Issued
  • Asiana Shares (74,322,043 shares*) → Converted into New Korean Air Shares (20,337,721 shares)
    • From Asiana’s total shares (205,990,711), Korean Air’s holding shares (131,578,947) and Asiana’s treasury shares (89,721) were excluded
  • Merger ratio 1 : 0.2736432 (As of May 12, 2026)
• Base Stock Price Calculation (Merger Price) : Calculation based on Article 176-5(1)1 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act
  • Based on the arithmetic average as of May 12, 2026 (the day before the board resolution)
    ① 1-Month Volume-Weighted Average Price, ② 1-Week Volume-Weighted Average Price, ③ Most recent day's Closing Price
  • Korean Air : KRW 25,409 , Asiana Airlines : KRW 6,953

• The issuance of new shares pursuant to this merger is accompanied not just by an increase in the number of shares but by asset integration and appreciation in the value of tangible and intangible assets resulting from the merger. Korean Air will make best efforts to ensure this leads to enhancement of the integrated airline’s corporate value and consequent expansion of shareholder value following this merger.
• Following the merger, Korean Air expects to realize fixed cost reductions and economies of scale through the integrated operation of flight infrastructure such as aircraft maintenance, ground handling, and in-flight catering through Post-Merger Integration (PMI) procedures over the medium to long term, and duplicate management costs are expected to be reduced through integration of overseas branches and sales networks. Additionally, by integrating and managing liquidity dispersed across both companies, Korean Air expects to enhance capital management efficiency, and based on the secured cash capacity, optimization of aircraft acquisition investments and improvement of financial leverage will become possible.
• In particular, based on Korean Air’s unrivaled aviation expertise including air traffic rights and global network expansion and establishment of an integrated fleet, Korean Air will make best efforts to further strengthen competitiveness on the global stage so that shareholders can receive the returns therefrom.
• Korean Air currently has a medium to long-term dividend policy of returning within 30% of net profit based on separate financial statements. Post-merger, Korean Air will continuously strive to establish shareholder return measures and broaden dividend payout ratios based on efficient management and profitability-centered business operations.

• Korean Air has continuously improved its credit profile following the rating upgrade from BBB+ to A- in October 2023 based on solid operating performance. Korean Air currently maintains an A0 rating as of 2026. This improvement has been driven by capital enhancement through accumulated net profits over multiple years and ongoing efforts to reduce borrowings which contributed to strengthening financial stability. Major domestic credit rating agencies maintain a favorable outlook on Korean Air’s future earning capacities.
• Based on the upgraded credit profile, Korean Air will continue to optimize capital costs and ensure financial stability after the merger. Further, Korean Air is fully committed to improving its financial indicators and boosting corporate value by, for example, establishing a post-merger target debt ratio.

• According to Article 527-3 of the Commercial Code, a surviving company can approve a merger through a board of directors' resolution instead of a shareholders' meeting if it qualifies as a 'small-scale merger.' This applies when the new shares issued for the merger do not exceed 10% of the company's total issued shares, and any cash consideration is under 5% of its net assets.
• Number of new shares issued by Korean Air for this merger is estimated to be c. 5.52% of Korean Air's total issued shares, thereby meeting the small-scale merger requirement. Therefore, Korean Air will conduct this transaction as a small-scale merger, meaning that a board resolution will replace the shareholders' meeting to approve the merger. Korean Air will provide shareholders with instructions on how to submit an objection to the small-scale merger, as required by relevant laws.
• However, if shareholders holding 20% or more of the total issued shares object to the small-scale merger, the transaction cannot proceed as a small-scale merger. In such an event, Korean Air will follow a standard merger procedure under Article 522 of the Commercial Code and hold a shareholders' meeting to approve the merger. (See Q&A No.5-1)

• As this merger will be conducted as a small-scale merger, Article 522-3 of the Commercial Code concerning appraisal rights does not apply in accordance with Article 527-3, Paragraph 5 of the same code. Consequently, appraisal rightsThe right allowing a shareholder who submitted a written objection to the company before the shareholders' meeting resolution to request the purchase of their shares within 20 days from the resolution date. (Article 165-5 of the Capital Markets Act)for Korean Air shareholders are not granted under the law, and there will be no procedure for the exercise of such rights.
• However, pursuant to Article 527-3, Paragraph 4 of the Commercial Code, the merger cannot proceed as a small-scale merger if shareholders holding 20% or more of the total issued shares of Korean Air notify the company in writing of their opposition to the merger within two weeks from the date of the public notice of the small-scale merger. In such an event, Korean Air will guide the shareholders through the relevant procedures in accordance with applicable laws and regulations(*) .
  • The notification period for objecting to the small-scale merger begins on May 28, 2026 (See Q&A No.5-1)
• In this case, the merger will proceed as a standard merger following Article 522 of the Commercial Code. As appraisal rights under Article 522-3 of the Commercial Code are recognized for Korean Air shareholders in a standard merger, dissenting Korean Air shareholders may exercise the rights in accordance with relevant laws and regulations.
• Asiana plans to proceed with the appraisal rights procedure after holding an extraordinary general meeting of shareholders in August this year.

• For any further inquiries regarding this merger agreement, please contact the Investor Relations department below.
• Phone : 82-2-2656-5086
• E-mail : IR@koreanair.com

Q1. What are the long-term visions and goals of the integrated Korean Air?

Q2. What are the expected synergies of the integration?

Q3. What benefits will be provided to customers as a result of the merger?

Q4. Why Korean Air is merging with Asiana Airlines instead of keeping it as a subsidiary?

Q5. What are the remaining procedures for the merger following board approval?

Q6. Why is the integrated airline launch date set for December 17, 2026?

Q7. How was the merger ratio determined, and is it appropriate?

Q8. What measures will be taken to mitigate equity dilution for existing shareholders following the post-merger share issuance, and what is the shareholder return policy?

Q9. What are the measures and plans to address deterioration of Korean Air’s financial soundness, such as an increase in debt ratio following the merger?

Q10. Will Korean Air hold a shareholders' meeting to approve the merger agreement?

Q11. Can shareholders who oppose the merger exercise appraisal rights?

Q12. Where can I reach out for further questions?

The right allowing a shareholder who submitted a written objection to the company before the shareholders' meeting resolution to request the purchase of their shares within 20 days from the resolution date. (Article 165-5 of the Capital Markets Act)