Korean Air Gets Approval from UK on Asiana Merger, Awaits Green Light from EU, Japan, US
The United Kingdom’s Competition and Markets Authority (CMA) recently announced its approval of Korean Air’s business combination with Asiana Airlines.
According to an announcement, the CMA announced on November 28 last year that it accepted remedies submitted by Korean Air, and would listen to market opinions before approving the business combination. Later, the CMA notified the airline on January 26 that it needed more time to review the remedies and would extend its review until March 23.
“The CMA’s approval is evidence that the proposed remedies submitted by the airline have resolved competition restriction concerns,” Korean Air said.
As part of the remediation effort, Korean Air will enter into a cooperative partnership with Virgin Atlantic’s operation on the London Heathrow – Seoul Incheon route.
Korean Air and Asiana are respectively the first and second largest airlines in South Korea. They operate a network of domestic routes, short-haul routes in Asia as well as long-haul routes between South Korea and the rest of the world.
Korean Air has stated that it will continue to fully cooperate with all authorities to receive approvals at the earliest opportunity.
From January 2021, Korean Air has reported its business combination to a total of 14 competition authorities. Eleven countries including the UK, have either approved the combination (Turkey, Taiwan, Malaysia, Vietnam, Korea, Singapore, Australia, China, UK) or have concluded the review on the grounds that the business combination was not subject to review or report (Thailand, Philippines).
Korean Air now awaits the business competition approvals from the European Union, Japan and the United States.
EU opens in-depth investigation
On February 11, the European Commission announced that it has opened an in-depth investigation to assess, under the EU Merger Regulation, the proposed acquisition of Asiana by Korean Air. The Commission is concerned that the transaction may reduce competition in the markets for passenger and cargo air transport services between the European Economic Area (EEA) and South Korea.
“Korean Air and Asiana are close competitors and the two leading airlines that transport passengers and cargo between Europe and South Korea,” the Commission’s Executive Vice-President in charge of competition policy, Margrethe Vestager, said.
“With our in-depth investigation, we will ensure that the acquisition of Asiana by Korean Air does not impede competition and will not lead to higher prices, less capacity or lower quality for passengers and cargo air transport services,” she added.
The Commission is expected to take a decision by July 5.
Danae Airlines S.A. is the GSA (General Sales Agent) of Korean Air for Greece.