Korean Air sees success from CSA Czech Airlines acquisition while growing its Etihad partnership

Korean Air, in one of the still-rare international airline acquisitions, bought a 44% stake of CSA Czech Airlines in 2013 for a relatively light EUR2.64 million. The Korean flag has been rewarded by growth of over 200% in the number of passengers transiting in Prague, Czech's hub. But also light are details on the strategic rationale of the acquisition. Hub cooperation - and this boosting of transit passengers - could theoretically have been achieved without equity.

While Korean Air has detailed how transit passengers in Prague have risen from about 600 a month in 2012 to a peak of 2,000 in Sep-2013, Korean has not stated what volumes it has lost in Frankfurt. Korean Air and Lufthansa had a successful interline agreement that was terminated in advance of Korean's acquisition of Czech.

Korean is touting the benefit of reaching additional European cities from Prague, but again it is unclear how much of this is growth versus replacement from Lufthansa. It is also unclear what further synergies exist between the carriers.

Also in the partnership spectrum - small but more rationale - Korean Air is expanding a deal with Etihad Airways, now a global leader in cross-border purchases and partnerships. Korean Air will code on Etihad's services to Johannesburg and Muscat while Etihad will code on Korean's services to Honolulu and Vancouver.