Summary
- Asiana Airlines and Korean Air are still in talks regarding a merger.
- Selling Asiana’s cargo operations is crucial for obtaining regulatory approval from the European Union.
- The merger proposal remains to be not approved by the EU, Japan, and the US, with concerns raised about reduced competition.
Seoul-based Asiana Airlines plans to proceed discussing a proposal from Korean Air to merge. The carrier reportedly indicated on Tuesday that it can reconvene a board meeting in regards to the matter
The airline’s board of directors met on Monday but didn’t choose whether to just accept Korean Air’s offer, which would come with divesting its cargo operations. The move to sell Asiana’s cargo unit is reportedly an important think about obtaining regulatory approval amid concerns from the European Union.
Talks to resume soon
In accordance with FlightGlobal, Asiana, which is South Korea’s second-largest airline, said in a stock exchange filing that following the board’s meeting on Monday. In consequence, the board will meet again to resume talks regarding the small print of the proposal.
Photo: TonyV3112 | Shutterstock
Asiana didn’t disclose when the following board meeting would happen but reportedly indicated that a second meeting could be scheduled soon, in line with a press release obtained by Channel News Asia (CNA).
“The board meeting that’s now in recess will resume in early November and make a final decision.”
Anti-competition remedies
The country’s largest carrier, Korean Air, reportedly planned to submit a corrective motion plan to the European Commission by the tip of October to receive regulatory approval from the EU. The plan is geared toward addressing anti-competitive concerns, which incorporates details on selling Asiana’s cargo division and measures to take care of employment levels, in line with The Load Star.
Photo: Komenton | Shutterstock
Korean Air reportedly had until the tip of the day on Tuesday to submit the plans, but since Asiana officials have yet to make a call, the airline needs additional time and confirmed the changes in a press release to Reuters, in line with CNA.
“We’re unable to submit the remedies by the tip of October. Korean Air will choose the brand new treatment submission date in line with the choice of Asiana Airlines’ board of directors.”
Investigating the proposal
This comes after the EU prolonged the deadline to approve the merger from mid-summer of this yr to August following authorities in China and the UK deciding to approve the deal. Nevertheless, the proposal has still yet to receive approval from the EU, Japan, and the US. Earlier this yr, EU officials launched a four-month-long in-depth investigation to evaluate whether the merger would impede the industry and lead to less capability or lower quality for passengers.
In May, the European Commission opposed the merger because of concerns over its potential to cut back competition between South Korea and the European Economic Area and Europe. The commission cited that routes between France, Germany, Italy, and Spain could be specifically affected, along with competition on cargo routes being decreased, in line with FlightGlobal.
Asiana’s share price on Tuesday reportedly climbed to as much as 14.2% because the airline continues to get better from earlier losses. Korean Air’s share price increased by about 2.5%, and the benchmark price index was down 1.3%, in line with CNA.