The European Commission (EC), the executive arm of the European Union, has granted approval for Korean Air’s acquisition of Asiana Airlines, leaving the US as the only jurisdiction left to give the go ahead for the major merger.
The widely expected approval comes shortly after Japan’s Fair Trade Commission (JFTC) gave its approval for the deal and stipulates similar conditions, including the expectation that Korean will divest Asiana’s cargo business.
Additionally, the EC said Korean must carry out its proposal of allowing fellow Korean airline T’way Air the assets, such as flight slots and traffic rights, needed to start operations on the four routes where Korean and Asiana’s current services overlap.
An agreement on the conditions of the EC’s approval comes after a year-long investigation, first opened by the Commission in February 2023 following a pre-consultation process with Korean that began in January 2021.
The merger itself was first announced in 2020 and has met scrutiny from many of the 13 jurisdictions required to grant approval, thanks to the inclusion of two of Korea’s biggest airlines and a notable number of overlapping services.
However, with the EC’s conditional approval, the merger is only waiting on US approval. This could be the biggest hurdle for the deal, following reports the Department of Justice had been considering suing to block the acquisition.
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By GlobalData
The US Government has been increasingly strict with airline mergers under the Biden administration, successfully convincing the courts to block both JetBlue’s acquisition of Spirit Airlines and JetBlue’s Northeast Alliance with American, though both decisions are facing an appeal.
A statement from Korean Air said: “With the EC approval secured, Korean Air continues to be focused on its discussions with the U.S. competition authority to finalize the overall merger review processes as soon as possible.”
