The European Commission (EC) has tentatively scheduled a decision on the proposed merger between Korean Air and Asiana Airlines for February 19, 2024. The merger, valued at KRW1.8 trillion won (USD1.37 billion), involves Korean Air acquiring a 63.9% stake in Asiana, leading to the integration of assets and the dissolution of the Asiana brand.
However, the EC has expressed concerns about the potential impact on competition in cargo and passenger routes between South Korea and European airports. In May, the EC communicated objections to Korean Air, focusing on potential reductions in passenger and cargo transport services between South Korea and France, Germany, Italy, Spain, and the entire Europe-South Korea route.
In response, Korean Air proposed remedies to address these concerns, including slot handovers at European airports and the sale of Asiana’s cargo business. These remedies are contingent upon EC approval of the merger. In July, the EC delayed its final decision at the request of Korean Air.
In early November, Korean Air submitted additional proposals, leading to the resumption of the EC’s decision-making process. EC competition boss Didier Reynders has mentioned “very good progress with some proposals.” Korean Air is actively working to obtain approval from the EC, USA, and Japan. The US authorities have rejected Korean Air’s proposal for Air Premia to operate flights on the South Korea – US route, indicating a desire for an alternative airline of at least the size of Asiana.
Approval from the EC, along with the completion of the regulatory process in the USA and Japan, is essential for the successful realization of the merger. The decision will significantly impact the future competitive landscape in the aviation industry, and stakeholders will closely follow developments as the merger undergoes regulatory scrutiny.
