Korean Airlines is taking charge at a Jonah.

It will invest about $1.6 billion to become the largest shareholder in its local rival.

The pair hope that working together will help them survive the ongoing collapse in demand.

It's also likely a relief for heavily indebted a Ziana, which was kept going in September by a cash injection from creditors to pay for the deal.

Korean Air says it will issue new shares next year, with any excess funds raised used to pay off debts.

The airline says it expects the deal to be finalized by the second half.

Combining the two firms will mean up to 1000 overlapping roles, but for now the plan is to avoid compulsory redundancies.

The tie up will also integrate the two airlines budget carriers, including Airbus on and Air Soul.

It all marks the biggest shake up in South Korea's air travel market since a Ziana was founded ahead of the 1988 Seoul Olympics.

The new carrier will command about 60% off international routes from the country.