While Korean Air is moving closer to gaining all the regulatory approvals it needs to complete its takeover of its rival Asiana Airlines, the process is also spawning significant opportunities for other airlines, thanks to competition remedies required by overseas regulators.
Korean Air cleared an important hurdle on 13-Feb-2024 when it was granted approval from the European Commission for the proposed merger with Asiana. This followed hard on the heels of a similar approval from the Japanese government on 31-Jan-2024.
The merger has now been given the green light by almost all of the 14 competition authorities in markets served by both Korean Air and Asiana. At the beginning of 2024 there were three key regulators yet to sign off on the deal – those from Japan, the US and the EU.
Now there is just one left – albeit, one of the most important.
Some of the national authorities have exacted a fairly high price to assuage their concerns regarding effects on competition. However, the deal is still very attractive for Korean Air, and will vault it into the top tier of global airlines.
The remedies will see Korean Air transferring slots to the South Korean carrier T’way Air in the European market, and Virgin Atlantic in the UK market. Similar arrangements are likely for Air Premia in the US market.
In some of these cases, Korean Air will also provide aircraft and other resources to the smaller airlines to allow them to start the new routes quickly.
For markets such as Japan and China, slots will be made available by Korean Air if other airlines want to launch services on certain specified routes.
Korean Air has also agreed to sell off the entire Asiana freighter operation after the merger is completed, addressing concerns by some regulators regarding cargo competition.