Singapore approves Korean Air-Asiana combination

Korean Air still needs the nod from Korea, US, EU, Japan, China, UK, Australia; Korea is expected to grant approval with conditions

Korean Air and Asiana Airlines aircraft at Incheon International Airport

Jeong Min Nam 1

2022-02-09 18:02:17 peux@hankyung.com

M&As

Singapore’s antitrust authority approved the integration of Korean Air Lines Co. and Asiana Airlines Inc., paving the way for South Korea’s top carrier to speed up its acquisition of the smaller local rival and become the world’s No. 7 airline.

The Competition and Consumer Commission of Singapore (CCCS) said on Tuesday it cleared the proposed acquisition of Asiana by Korean Air.

“CCCS found that it is likely that the merged entity will continue to face a high degree of competition from Singapore Airlines,” the competition regulator said in a statement. “Further, the entry and potential entry of new players will constrain the merged entity’s ability to raise prices, and disrupt any coordination between market players, in terms of price or sales terms.”

Korean Air still needs to get permission for the 1.8 trillion won ($1.5 billion) acquisition from South Korea, the US, the European Union, Japan, China, the UK and Australia.

It must secure approvals from South Korea, the US, the EU, Japan and China to complete the deal. The airline voluntarily sought permission from the UK and Australia to prevent potential antitrust investigations.

“We will actively cooperate with competition authorities that have yet to give their approval to complete the process as soon as possible and acquire Asiana Airlines,” said a Korean Air official.

KOREA EXPECTED TO APPROVE WITH CONDITIONS

South Korea’s antitrust body on Wednesday reviewed Korean Air’s acquisition of Asiana.

The Fair Trade Commission is expected to approve the integration of the country's top two carriers with some conditions. Last year, the FTC set up certain conditions, including that the two carriers return some of their airport landing slots and flight licenses to operate planes on certain routes.

Korean Air was known to have told the regulator that it would accept only some of these conditions in an opinion submitted on Jan. 20.

The FTC is expected to make a final decision as early as mid-February.

Write to Jeong Min Nam at peux@hankyung.com
Jongwoo Cheon edited this article.