(2nd LD) EU regulator conditionally approves Korean Air-Asiana Airlines merger

SEOUL, The European Union (EU)'s antitrust regulator on Tuesday conditionally approved a merger between Korean Air Co. and Asiana Airlines Inc., clearing a major hurdle in the consolidation process between South Korea's two full-fledged air carriers. The European Commission (EC), the executive body of the EU, said it decided to give a conditional nod to the 1.8 trillion-won (US$1.4 billion) merger deal that was announced in 2020 after reviewing the merger plan submitted by the airlines. The commission has looked into the case amid concerns that the merger may restrict competition in the markets for passenger and cargo air transport services between the EU and South Korea. In a bid to win the EC's approval, the companies decided to sell Asiana's cargo business and divest passenger flight routes to four European cities, and reported the remedial measures to the commission in November. Korean Air is expected to finish the selection process of a potential buyer of Asiana's cargo business before October. The company said in a statement Tuesday it will first appoint an advisory firm to select a buyer and that "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 take place," it added. It said it will also help its local budget rival T'Way Air to gradually launch new routes to Paris, Rome, Barcelona and Frankfurt sometime during the second half to "maintain a competitive environment in the relevant markets." The EU antitrust body's full approval will be given when and if the two airlines follow through with the remedial measures. The companies have so far won approval from 13 countries and regions and are waiting for the final approval from the United States. "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," the statement read. For the merger to be finalized, the airlines must win approval from competition regulators in key markets. A rejection by the EC would have virtually terminated the merger deal. Korean Air Chairman and CEO Cho Won-tae said in a New Year's message to company employees in January that the firm "will complete the acquisition of Asiana Airlines in 2024," while noting that the process "has taken much longer than expected." Source: Yonhap News Agency

RECENT POSTS