LX Pantos mulls Air Premia acquisition to facilitate global logistics service

LX Pantos Co., the logistics unit of South Korea’s LX Group, is looking to acquire a controlling stake in local budget carrier Air Premia Co., in an aim to offer cargo deliveries across the globe.

By operating its own cargo carrier service, LX Pantos, Korea’s largest overseas freight forwarder, is looking to expand its logistics business globally, people familiar with the matter said on Monday.

An LX Pantos executive, however, said the company is closely looking at the airline industry for the possible acquisition of a budget airliner, but “no firm decision has yet been made.”

The company’s possible bid for Air Premia comes as the low-cost carrier, which also started passenger flights last month, is taking a hit from the resurgence of the COVID-19 pandemic in the region, sources said.

Up for grabs is a combined 48.7% stake owned by Air Premia’s two largest shareholders – Korean investment consulting firm JC & Partners Co., and Park Bong-cheol, chairman of Korchina, a Hong Kong-based logistics company.

JC & Partners, which has a 24.7% stake in Air Premia, and Park Bong-cheol, who owns 24% of the budget carrier, hope to receive a combined 200 billion won ($154 million) for their stakes, according to the sources.

HYBRID BUDGET CARRIER

Founded in 2017 by former Jeju Air President Kim Jong-chul, Air Premia has largely transported cargo on international routes from Incheon to Singapore, Ho Chi Minh City and Bangkok.

The company received an air operator certificate (AOC) from Korea’s transport ministry in July 2021.

Since mid-July of this year, the company has also been flying a 309-seat B787-9 passenger jet, dubbed the Dreamliner, on the Incheon-Singapore route.

As a hybrid service carrier, Air Premia aims to provide services similar to full-service carriers on medium and long-haul routes that low-cost carriers are unable to fly.

CASH COW OF LX GROUP

LX Pantos, the cash cow of LX Group, has been aggressively expanding its logistics business.

In June of last year, it said it is entering the global e-commerce market by launching a worldwide fulfillment service to compete with bigger rivals such as Amazon and Alibaba.

The business was the group’s first project since it was spun off from Korea’s fourth-largest conglomerate LG Group and relaunched as LX Group, led by Koo Bon-joon, uncle of LG Group Chairman Koo Kwang-mo.

As part of a corporate restructuring, the older LG Group hived off five subsidiaries and placed them under another holding firm, LX Holdings Corp.

LX International is the parent of LX Pantos with a 51% stake in the logistics firm.

With its 360 logistics centers around the world, Pantos has so far engaged in business-to-business (B2B) delivery services.

The company is particularly interested in air deliveries of vaccines and other medical products. It is the only Korean logistics firm that has the necessary equipment to transport vaccines.

Last year, LX Pantos posted 360.3 billion won in operating profit on a consolidated basis, more than half its parent LX International’s operating profit of 656.2 billion won.

Write to Si-Eun Park and Kyung-Min Kang at seeker@hankyung.com
In-Soo Nam edited this article.