The Korean Air and Asiana Airlines merger is facing further delays for international approval. The European Union announced that it would be extending its decision date on the proposed acquisition from July 5 to August 3.
The combination of Korea’s two largest airlines was originally announced in November 2020 by the Korean government and Korea Development Bank. The deal would be worth more than $600 million. Korean Air will take an approximately 65 percent stake in Asiana and consolidate the airline.
The European Commission opened an in-depth investigation in February to assess whether the transaction could hurt competition. Preliminary concerns from the first phase of its review addressed the potential antitrust issues for passenger transport and cargo transport services between South Korea and the European Economic Area. Specifically, authorities EC mentioned reduced competition for four direct routes from Incheon to Paris, Frankfurt, Rome, and Barcelona.
Korean Air is a member of the SkyTeam alliance. Following the successful completion of the merger, Asiana will become part of SkyTeam and be integrated into Korean Air, making it the world’s seventh-largest airline according to The Korea Times. Asiana is currently a member of the Star Alliance.
The transaction sought approval from fourteen regulatory bodies. Korean Air submitted required business combination reports to nine countries in January 2021. Since then, it has received approval from mandatory bodies like Australia, Korea, Malaysia, Singapore, Turkey, Taiwan, and Vietnam.
China approved the merger in December 2022, and the U.K. recently gave its approval in March 2023. Thailand and the Philippines concluded that the submission of a business combination report was not necessary.
The EU, Japan, and the U.S. have yet to give the green light. The transaction is in a preliminary consultation phase in Japan, while the U.S. deemed it necessary to take more time for review.
