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(14/02/24)
 The European Commission (EC) has given
conditional clearance for Korean Air’s acquisition of Asiana
Airlines, subject to the airline’s
compliance with certain commitments agreed upon with the EC.

Korean Air initiated a pre-consultation process with the EC in
January 2021, followed by the submission of a formal merger
notification in January 2023.

The EC opened a Phase II review of
the merger in February, and issued a Statement of Objections in
May in which the EC expressed competition concerns resulting from
the merger in both passenger and cargo markets.

To
address the concerns, commitments have been
offered, primarily consisting of two elements: (1) divestment of
Asiana Airlines’ cargo freighter business; and (2) providing
support to ensure the entry by a new airline on the four
overlapping passenger routes between Korea and the European Union.

T’Way Boeing 737 reg: HL8047. Picture by Steven Howard of TravelNewsAsia.com

For the implementation of the
cargo commitments, Korean Air and Asiana Airlines will need to
take several steps, such as appointing an advisory firm to oversee
the divestment of Asiana Airlines’ cargo freighter business, as
well as initiating the bidding process, and selecting a buyer of
the cargo business.

The approval by the EC of the selected buyer
is required to close the airlines’ merger deal. Once Korean Air
completes the acquisition of Asiana Airlines, the actual cargo
divestment process will then take place.

Under the passenger
commitments, T’way Air has been appointed as the “remedy taker” on
the designated European passenger routes. Starting from the second
half of this year, T’way Air will gradually initiate operations on
the following four routes: Seoul Incheon-Paris, Seoul Incheon-Rome, Seoul
Incheon-Barcelona, and Seoul Incheon-Frankfurt.

Korean Air has now successfully obtained approval or
completed the review process with 13 of the 14 regulatory
authorities requiring business combination approvals.

The thirteen are: Türkiye (Feb 2021), Taiwan (May
2021), Thailand (May 2021), Philippines (May 2021), Malaysia (Sep
2021), Vietnam (Nov 2021), Korea (Feb 2022), Singapore (Feb 2022),
Australia (Sep 2022), China (Dec 2022), United Kingdom (Mar 2023),
Japan (Jan 2024), European Union (Feb 2024.

Only the USA is now
pending approval.

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