Korean’s Takeover Of Asiana Approved By EU

Korean Air has had its takeover of Asiana Airlines to create a mega airline in Asia approved by the EU, however, with some remedies.

The EU has officially approved Korean Air’s plan to take over Asiana Airlines, which is another positive step for the two airlines, hopefully to complete the deal sooner rather than later.

A decision followed an in-depth investigation into the two airlines and the proposed implications of a deal going ahead. Given that Korean Air is the largest airline in South Korea and Asiana is the second largest, much had to be deliberated.

Concerns Outlined

The EU initially said it had gathered substantial feedback from market participants and key stakeholders.

As a result of this feedback, several concerns were outlined, including harming competition for air cargo transport services between Europe and South Korea.

Additionally, the focus was on the negative implications of competition to offer passenger air transportation routes between Seoul and European destinations, including Barcelona, Paris, Frankfurt, and Rome.

When merging the two South Korean airlines, it was viewed that they would become the largest carrier on the aforementioned routes, thus hurting customers with the lack of competition. The EU lastly cited potential price increases, too.

Proposed Remedies

As part of its investigation and completion of its due diligence, the Commission outlined several proposed remedies to address the initial concerns.

First, the EU says that Korean Air will divest the Asiana cargo business, including freighter aircraft, slots, traffic rights, and crew, among other crucial areas.

Additionally, for passenger commitments, Korean Air will make the necessary assets available to rival airline T’Way to enable it to start flight operations on the four overlapping routes. This will include assets such as slots and traffic rights.

To Conclude

The EU says they’ll put an independent trustee on the case to monitor the implementation.

Based on the proposed remedies, the Commission believes the concluded transaction would no longer have further competition concerns.

Ultimately, while there have been proposed remedies for Korean Air and Asiana Airlines, it’s a step in the right direction instead of an outright rejection, which could’ve quickly impacted the two airlines.

The consensus is that the pair are willing to abide by the comments from the EU and will continue to move ahead. However, it still notably awaits clearance from the United States, which has taken a substantial period to move forward.

Daniel Fowkes
14 Feb 2024
· Airlines 

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