Subject to certain conditions laid out by the European Commission, the Asiana-Korean Air merger has been approved in Europe.
This is another big step for consolidation within the South Korean airline industry to occur, as both sides seek regulatory approval worldwide.
Without further ado, let’s get into it…
European Commission Approves Asiana-Korean Air Merger…
The European Commission has approved the merger between Asiana Airlines & Korean Air, but under the following conditions:
- Cargo commitments: Korean Air will divest Asiana’s global cargo freighter business. The divestment includes freighter aircraft, slots, traffic rights, flight crew, and other employees, as well as customer cargo contracts, among others. Korean Air can only implement the acquisition of Asiana following the Commission’s approval of a suitable buyer for the cargo divestment. Among other requirements, the buyer must be able and have the incentives to operate the divested business in a viable manner and to compete effectively with the merged company.
- Passenger commitments: Korean Air will make available to rival airline T’Way the necessary assets to enable it to start flight operations on the four overlap routes. The assets include slots and traffic rights as well as access to the required aircraft. T’Way is a South Korean airline with a hub in Seoul from where it operates a network of routes in East Asia and beyond. Korean Air has committed not to complete the merger until T’Way has started operating on the four overlap routes.
This comes following the in-depth investigation into the merger highlighting that unless these remedies are made, competition would be harmed.
“The Commission found that Korean Air and Asiana compete head-to-head in carrying cargo and passengers between the EEA and South Korea.”
“Together, they would have been by far the largest carrier on these routes removing an important alternative for customers.”
“Other competitors face regulatory and other barriers to expand their services and would have been unlikely to exert sufficient competitive pressure on the merged company.”
“This would likely have led to increased prices or decreased quality for passengers and cargo customers.”
All eyes on the next steps from both Korean Air and Asiana Airlines in this saga.
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