US extends antitrust review of Korean Air-Asiana merger

Korean Air is known to have told the US Justice Dept that the deal may not hurt competition if US carriers expand US-Korea routes

 Korean Air and Asiana Airlines aircraft at Incheon International Airport (Courtesy of News1)
 Korean Air and Asiana Airlines aircraft at Incheon International Airport (Courtesy of News1)
Ik-Hwan Kim 1
2022-11-16 15:34:13 lovepen@hankyung.com
Mergers & Acquisitions

The US competition authority extended its review of the proposed merger between South Korea’s two largest airlines to check if the deal hurts competition in the world’s second-largest aviation market, adding to concerns over a potential delay in the creation of the world’s No. 7 airline.

The US Department of Justice notified Korean Air Lines Co. that the watchdog needs time to further review the company’s acquisition of Asiana Airlines Inc., according to South Korea’s flag carrier on Wednesday.

“We submitted data the US required and faithfully responded to their inquiries,” said a Korean Air official. “We will actively cooperate in the future review process for a positive conclusion.”

Korean Air had expected the department to approve the deal around the middle of this month as the company applied for a review to the authority in late August and the watchdog said it would be concluded it in 75 days.

WON'T HURT COMPETITION IF US CARRIERS EXPAND US-KOREA ROUTES

The department was set to focus on the combination’s impact on the aviation market competition as the US is a key market for both Korean Air and Asiana. Korean Air generated 29% of its total sales from US routes in 2019 before the breakout of COVID-19.

Korean Air was known to have told the authority that the merger would not undermine competition if the country’s United Airlines Inc. and Delta Air Lines Inc. expand US-South Korea routes.

The US decision on the merger is expected to influence other antitrust authorities. On Monday, the British watchdog raised questions over the combination’s impact on competition, requesting Korean Air and Asiana submit proposals to address these concerns.

Since Korean Air announced its 1.8 trillion won ($1.4 billion) takeover of Asiana in late 2020, South Korea’s top airline has received the go-ahead from nine authorities, including a conditional nod from Korea’s antitrust body.

It still must go through reviews by five others – the US, China, Japan, the European Union and the UK.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Cheon edited this article.
#Korean Air #Korea airlines #Asiana #USA #antitrust #justice department #UK #Delta #United Airlines #China #Japan #EU

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