European Commission approves Korean Air’s planned Asiana merger…with conditions

Korean Air has some serious hoops to jump through before full approval for its planned merger is given, as MATT LENNON reports.

The European Commission (EC) has issued tentative and conditional approval to Korean Air as it edges closer in its three-year quest to merge with arch-rival Asiana Airlines.

It’s the 13th approval received from 14 regional competition regulators that Korean Air requires to complete the merger, with each assessing the planned tie-up to ensure travellers are not disadvantaged by the removal of one of their former airline options.

However, the green light from the EC comes with a line of hoops and hurdles that Korean must successfully and satisfactorily navigate in order to receive the full sign-off.

Among these commitments is a pledge by KE to provide “comprehensive support” to rival Korean carrier T’Way Air, which has been approached by the European Commission as a “remedy taker” to step in and take over four routes once operated by Asiana.

Namely, these services – to Paris, Rome, Barcelona and Frankfurt – will reintroduce competition to Korean Air to ensure travellers have access to a competitive market on flights to Seoul and onward.

It’s unclear what this support to be provided by Korean will entail but beginning in the second half of 2024, travellers in these cities can expect to see the long-haul low-cost carrier T’Way Air appearing in local skies.

Other EC conditions call for the divestiture of Asiana Airlines’ cargo freighter business, with Korean required to initiate a bidding process and select a buyer, which in turn must be approved by the European Commission.

Two years ago, Australia’s ACCC rubber-stamped Korean’s planned acquisition after deeming Qantas and Jetstar would provide enough competition on flight routes between Australia and South Korea, with both Korean Air and T’Way Air also operating nonstop services between the two.

The final hurdle still in the way of Korean’s three-year merger approval process stands as the US Federal Trade Commission’s Bureau of Competition, with Korean saying it is now focused on securing the required approval and closing this long-running chapter in its corporate history.

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