Summary
- European Commission sets a brand new deadline of February 14, 2024, to make a decision on Korean Air’s proposed acquisition of Asiana Airlines.
- The investigation was temporarily halted, however the EU’s antitrust chief described progress as superb.
- Asiana Airlines approved the sale of the cargo unit, however the high valuation and potential lack of buyers may affect the merger’s consequence.
The European Commission has set a brand new deadline to make a decision whether to clear Korean Air’s proposed acquisition of Asiana Airlines. Nonetheless, progress has been described as superb by the EU’s antitrust chief, Didier Reynders. The proposed merger between each corporations was first announced in November 2020 but requires approval from European, Japanese, and United States authorities.
Moving forward toward the acquisition
First reported by Reuters, EU antitrust regulators set a brand new date of February 14, 2024, to possibly approve the Korean Air and Asiana Airlines merger (Asiana’s brand could be acquired by Korean Air).
Thus far, the investigation from the European Commission has been temporarily halted while the businesses provided the requested information. Nonetheless, Didier Reynders told reporters.
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Last month, Asiana Airlines held a unprecedented board meeting to investigate and agree on Korean Air’s corrective motion plan, which included the proposal to sell Asiana Airlines’ cargo business.
The choice to sell Asiana’s cargo unit was needed to achieve European Commission antitrust consent. In May 2023, the Commission expressed concern that the merger could reduce competition in cargo transport services between Europe and South Korea.
Korean Air and Asiana Airlines also submitted other corrective motion measures, including a proposal to give up slots at 4 European airports, and assist other airlines to start operating to those airports from South Korea, as reported by ch-aviation.
Easy Flying reached Korean Air for comment on the brand new date set by EU antitrust regulators. The corporate didn’t respond.
Is the merger going through?
As Reuters reported last month, Asiana approving the sale of its cargo unit doesn’t necessarily be sure that the deal will undergo. The specified valuation for the cargo unit, which is about $520 million, including debt, might be too high. Not many players in South Korea could spend that much money on Asiana’s cargo business. Potential buyers should hold a current air operator’s certificate; it could’t be any random company. Some corporations formally expressing their interest in acquiring Asiana’s cargo business include Air Premia, Eastar Jet, and Air Incheon.
Photo: Senohrabek | Shutterstock.
Moreover, Korean Air and Asiana Airlines require approval from the USA and Japanese governments, which could possibly be influenced by the European Commission’s consequence.
In May, it was reported that the USA Department of Justice was considering suing the planned acquisition of Asiana Airlines. The DOJ feared that the merger could harm passenger and cargo traffic competition between South Korea and the USA. No further announcement has been made since, and the DOJ could ultimately not proceed with the lawsuit.
What would the merger include?
Asiana Airlines, plus its loyalty program, would fold into Korean Air, making a combined major airline in South Korea.
Moreover, Jin Air –Korean Air’s low-cost subsidiary–and Air Busan and Air Seoul –Asiana’s low-cost– could be integrated right into a separate combined low-cost carrier.
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