Planes of Korean Air and Asiana Airlines are seen at Incheon International Airport, west of Seoul, Jan. 31. Yonhap
Korean Air said Wednesday Japan’s antitrust regulator has approved a 1.8 trillion-won ($1.34 billion) merger deal with its smaller rival Asiana Airlines, moving the merger process between Korea’s two full-fledged air carriers one step further.
According to Korean Air, the Japan Fair Trade Commission (JFTC) approved the company’s business combination with Asiana Airlines earlier in the day, marking a significant milestone in the two airlines’ merger process.
In November 2020, Korean Air signed the deal to acquire a controlling stake in Asiana to create the world’s 10th-biggest airline by fleet.
For the merger to be finalized, the airlines must win approval from competition regulators in key markets.
The companies have so far won approval from 12 countries and are waiting for approval from the European Union and the United States.
Korean Air said it has proactively engaged in dialogues with all concerned parties to address various concerns raised by the JFTC.
According to Korean Air, the JFTC requested for Korean Air to submit remedies on select routes between Korea and Japan where the combined market share of Korean Air, Asiana Airlines and its respective subsidiaries would limit competition.
The JFTC concluded that five of the 12 overlapping routes on the network were not subject to competition review, the company said.
Korea Air said it has decided to cede a limited number of slots on seven routes, should other airlines decide to operate on them. These routes include Seoul to Osaka, Sapporo, Nagoya and Fukuoka, as well as Busan to Osaka, Sapporo and Fukuoka.
The JFTC also raised competition concerns about the bilateral cargo network. However, with the decision to divest Asiana’s cargo business, the JFTC limited its request for the airline to enter into a cargo block space agreement on select routes.
The divestiture of Asiana’s cargo arm is subject to the approval of all remaining competition authorities, and will occur after Asiana Airlines is incorporated as a subsidiary of Korean Air, the company said.
“Korean Air is committed to constructive dialogue with the remaining authorities — the EU and U.S. — to obtain approvals at the earliest opportunity,” the company said.
Korean Air Chairman and CEO Cho Won-tae said in a New Year’s message to company employees earlier this month that the firm “will complete the acquisition of Asiana Airlines in 2024,” while noting that the process “has taken much longer than expected.” (Yonhap)
