VIG, Eastar Jet’s largest shareholder, to acquire Air Premia as well

[Financial News] VIG Partners, the private equity firm that is Eastar Jet’s largest shareholder, has completed due diligence for its acquisition of Air Premia and begun full-scale price negotiations. If the acquisition goes through, the two airlines are expected to maintain independent operating structures while pursuing ways to link their medium- and short-haul routes with their long-haul routes.
According to the aviation industry on the 27th, VIG Partners conducted due diligence for about three weeks, from late September to the middle of this month, in connection with its acquisition of Air Premia. It reportedly reviewed Air Premia’s financial situation, workforce composition, aircraft lease contracts and route operations.
The acquisition target is the approximately 70% controlling stake in Air Premia held by AP Holdings, a private company belonging to the family of Tire Bank Chairman Kim Jeong-gyu, and Tire Bank. As of the end of last year, the two companies held 48.26% and 22.02%, respectively, for a combined 70.28%.
The acquisition price is being discussed in the range of 300 billion to 400 billion won, although there are reportedly differences of opinion over the company’s valuation. The final price is expected to be determined based on the due diligence findings and financial structure, among other factors. VIG Partners acquired Eastar Jet for 40 billion won in 2023. If this deal goes through, it will secure both Eastar Jet’s medium- and short-haul routes and Air Premia’s long-haul routes.
A leading option after the acquisition is to keep both companies’ corporate entities and brands unchanged. The plan is to reduce the additional costs of an airline merger and maintain their existing business bases while boosting competitiveness through measures such as linking routes. The aviation industry has also raised the possibility of adopting an operating model similar to that of the Air France-KLM Group.
Securing connecting passenger demand between China and the United States is seen as a key area for cooperation. Eastar Jet currently operates four routes from Incheon to mainland China and plans to add a route to Xiamen at the end of this month. Air Premia operates five U.S. routes, including Los Angeles (LA), San Francisco, New York, Washington, D.C., and Honolulu. Analysts say that linking the two airlines’ route networks could help them attract passengers traveling from China to the United States via Incheon International Airport.
[email protected] Jung Won-il Reporter