Summary
- The South Korean airline merger of Asiana Airlines and Korean Air will likely receive antitrust approval from the European Union, supporting Korean Air’s acquisition plans.
- Asiana Airlines, which is heavily indebted and is an element of Star Alliance, may dump its cargo subsidiary and share direct routes with other carriers.
- Once the merger is accomplished, Asiana Airlines is predicted to depart the Star Alliance and join SkyTeam, creating a possibility for one more airline to affix the South Korean market.
The South Korean airline merger of Asiana Airlines and Korean Air is presumed to win the European Union antitrust approval, which can support Korean Air’s plan to buy the Star Alliance carrier. This comes after the suggestion that its cargo subsidiary, Asiana Cargo, will likely be sold off, and 4 of its direct routes (Barcelona, Frankfurt, Paris, and Rome) will likely be shared with other carriers to take up the chance on the route.
Korean Air’s plans to merge with Asiana aren’t latest and further highlight widespread consolidation across the airline industry, akin to Lufthansa’s aspirations of acquiring ITA Airways.
Photo: Gabe Smith | Shutterstock
Asiana Airlines, which has been a part of the Star Alliance since March 2003, is heavily indebted. Through the COVID-19 pandemic, South Korea’s largest airline, Korean Air, offered to spend KR 1.8 trillion ($1.37 billion) to turn into the airline’s largest shareholder.
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T’way Air is waiting.
Because the suggestion of selling off the cargo division last November, South Korean low-cost-carrier T’way Air has made it known that it would really like to amass the cargo business after European officials noted it would favor a Korean carrier to be the popular buyer.
Since T’way’s inception in 2005, the carrier has grown to serve 46 destinations, with a fleet of over 30 aircraft from its hubs at Gimpo International (GMP) and Incheon International Airport (ICN). Its first long-haul service was launched in October 2022, when the carrier commenced a direct flight to the Australian state of Latest South Wales, serving Sydney Kingsford Smith International Airport (SYD).
Photo: T’way Air
As reported by Reuters, the European Commission declined to comment on its thorough approach to investigating airline mergers after past consolidations have reduced competition and raised airfares for travelers. Korean Air said it should provide complete remedies to deal with commission concerns.
While a choice from the European Union looks promising, the merger will still require approval from Japan and the USA. At the identical time, the UK has already cleared the best way for the deal to proceed, which saw its local carrier, Virgin Atlantic, start services from London Heathrow to Seoul Incheon last 12 months.
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Will we finally see a deal undergo this 12 months?
The US Department of Justice rejected the supposed merger last May, citing monopoly concerns. Nonetheless, a review of this is probably going now the choice for the cargo division to be sold off.
Malaysia, Turkey, and China have all already approved the merger.
Moving from Star Alliance to SkyTeam
Once the merger is accomplished, Asiana Airlines is predicted to depart the Star Alliance and join SkyTeam, leaving a spot within the South Korean market for one more airline to affix the combo. All Nippon Airways (Tokyo) or Air China (Beijing) can be the closest Star Alliance members post-withdrawal.
Photo: Vincenzo Pace | Easy Flying