Korean Air Lines Co., South Korea's No. 1 carrier, decided at a board meeting on Monday to buy smaller rival Asiana Airlines Inc., the company said.

The acquisition would create the world's seventh-largest airline company in terms of passenger and freight transport metrics, based on International Air Transport Association data.

When including budget carriers under their wings, the two airlines together command a 62.5 percent market share in domestic routes, according to local media. The acquisition must be approved by the Korea Fair Trade Commission.

Hanjin Group Chairman Cho Won Tae, whose conglomerate owns Korean Air, issued a statement saying that the decision to acquire the country's struggling No. 2 carrier is meant to allow the South Korean airline industry to grow sustainably.

To realize the acquisition, the state-run Korea Development Bank, which is leading a group of creditors to Asiana Airlines, will invest 800 billion won ($722 million) in Hanjin KAL Corp., the holding company of the group.

Korean Air will acquire enough shares in Asiana Airlines to become its largest shareholder.

Kumho Asiana Group, the struggling conglomerate that has Asiana Airlines under its umbrella, decided in April 2019 to sell the carrier.

After acquisition talks with a major construction company fell through in September due to the airline's accumulating debt amid the coronavirus pandemic, the state-owned bank began looking for a new buyer.

==Kyodo

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