[Edaily Reporter Lee Yoon-hwa] #Asiana Airlines announced on the 15th that it has decided to exercise its conversion rights for 100 billion won worth of Air Busan’s 6th perpetual convertible bonds, which it acquired in May 2025 to improve Air Busan’s financial structure.

The reasons for Asiana Airlines’ exercise of the conversion rights include an investment objective based on the expectation that Air Busan’s enterprise value will rise above current levels in the future, as well as a desire to maintain Air Busan’s financial soundness in light of its recent emergency management situation, thereby ensuring a stable integration within the designated timeframe.

Since 2023, Air Busan has successfully turned around its performance, recording superior operating results and high profit margins compared to competitors; however, Air Busan’s value remains undervalued. It is expected that corporate value will increase following the integration of low-cost carriers (LCCs) in the first quarter of 2027 through revenue and cost synergies, such as optimized procurement, resource efficiency, and improved utilization rates.

Furthermore, amid the worsening business conditions for LCCs—particularly due to high oil prices and exchange rates resulting from the prolonged war in the Middle East—the exercise of conversion rights by the parent company, Asiana Airlines, will alleviate Air Busan’s interest expense burden (approximately 6 billion won annually) and fundamentally improve Air Busan’s capital structure by resolving future interest rate step-up burdens.

An Asiana Airlines official stated, “We plan to continue our efforts to maintain Air Busan’s financial soundness, enhance its corporate value, and strengthen future competitiveness through integration.”