Korean Air Lines (KAL) has launched an internal valuation of its business units with the intention of hiving some off as part of ongoing restructuring efforts.

The country’s largest airline and part of holding company Hanjin Group, KAL is estimating the value of its in-flight meal services, mileage services and maintenance, repair and operations (MRO) services, as well as other units, sources said on May 15. Staff are calculating the market worth of each unit on the assumption that it would be split off from the company.

The results are expected to be reported soon to management, including Hanjin Group Chairman Cho Won-tae, who will likely make a decision by the end of July on which business units should be sold. The state-run Korea Development Bank, one of the key financiers of KAL, is pressuring the company to sell its non-core assets as part of efforts to tackle liquidity problems.

The in-flight meal service operation is likely to be the first to be put up for sale by KAL, industry watchers said. The conglomerate’s management is said to have tentatively put the unit’s valuation at hundreds of billions of won.

Asiana Airlines, the country’s second-biggest carrier, previously raised 160 billion won ($129.7 million) from Chinese Hainan Airlines, reportedly on condition that the two companies set up a joint venture, Gate Gourmet Korea, which started providing in-flight meals to Asiana in 2018. In 2016 Hainan’s parent HNA acquired Gategroup, which operates the Gate Gourmet brand, but sold its entire stake in the Swiss company in 2019.

KAL’s in-flight catering services generated estimated revenues of 100 billion won in 2019, according to market analysts. It is widely believed that the previous deal between Asiana and Hainan may be used as a reference for KAL, a factor that could speed up a sale of the KAL unit. The unit reportedly generates an operating income margin of 30 percent, which also could attract private equity firms.

“Revenue from in-flight catering services is directly linked to the number of international flights,” said an industry insider. “Chances are high that the in-flight catering unit could generate profit once the current coronavirus-related lockdowns are lifted.”

Meanwhile, it is likely that the mileage service unit will take a back seat in KAL’s restructuring efforts, as the recent trend has been for global airlines to operate this business internally so as to make use of customer data. The company could explore other options, such as raising funds through an initial public offering after separating the unit, industry watchers said. (Reporting by Ik-hwan Choi)