Korean Air has put forth a proposal to acquire Asiana Airlines, an airline undergoing financial difficulties. However, it has encountered resistance from both the European Union’s antitrust regulator and the United States Department of Justice. Both entities oppose the merger, arguing that it could disrupt competition on routes between their jurisdictions and South Korea.
In November 2020, Korean Air committed $1.624 billion to acquiring Asiana. In December 2022, Chinese authorities approved the merger. However, China’s Ministry of Commerce (MOFCOM) demanded Korean Air and Asiana reduce their market share to alleviate competition concerns.
EU Regulators Express Concern Over Potential Impact on Competition
The EU’s antitrust regulators concluded that the merger of Korean Air and Asiana could hinder competition in passenger and cargo air transport services between Europe and South Korea, according to Reuters.
The EU competition body consulted rival airlines, potential market entrants, and customers about the possible impact of the merger, stating that «the operation could decrease competition in passenger transport services on four routes between South Korea and France, Germany, Italy, and Spain.»
U.S. Department of Justice Considers Legal Action Against Korean Air
On the other hand, the U.S. Department of Justice is considering suing Korean Air to block the acquisition of Asiana Airlines. The U.S. agency has been investigating this merger for two years, and its concern is that it could disrupt free competition in the air market between the U.S. and South Korea.
Meanwhile, Korean Air will continue to negotiate with the U.S. government until a final decision is reached. In a statement the carrier said that «Korean Air has made, and continues to make, every possible effort to obtain all necessary approvals.»
The merger between the two main South Korean airlines would make Korean Air the principal shareholder of debt-ridden Asiana. The operation was agreed upon by Asiana’s creditors, led by the state-owned Korea Development Bank, in 2020.
