Korean Air-Asiana deal leads Asia-Pacific consolidation moves

While only a handful of Asia-Pacific airlines have gone out of business due to COVID-19, there have been some significant consolidation moves via mergers - with more potentially on the horizon.

As the COVID-19 crisis bloomed, many airlines in this region came under severe financial strain. But few actually collapsed, as governments and investors proved willing to prop up struggling airlines that might have otherwise disappeared.

Mergers are likely to be more effective in reducing the number of players in some markets. However, capacity reduction is often minimised when an airline's operations are absorbed by another airline. And in some cases, consolidation has presented opportunities for new start-ups to emerge.

Consolidation can take a number of forms. It can involve two unrelated or rival airlines, such as Korean Air and Asiana Airlines. It can also occur within airline groups, such as the Cathay Pacific and Singapore Airlines groups. The latter example allows the parent companies to streamline their operations, which will help set them up for the post-pandemic recovery phase.