EU temporarily halts probe of Korean Air-Asiana merger

Korean Air asked the European Commission to extend its probe deadline so it can prepare remedies; a final decision is expected in October

Korean Air and Asiana Airlines aircraft at Incheon International Airport (File photo, courtesy of Yonhap)

Mi-Sun Kang 2

2023-06-30 11:26:48 misunny@hankyung.com

Airlines

Europe's antitrust regulator has temporarily suspended its investigation into the proposed merger of Korean Air Lines Co. and Asiana Airlines Inc. as the country’s flagship carrier sought more time to prepare measures to address competition concerns.

Korean Air said on Thursday the European Commission has decided to postpone the conclusion of its probe, which had been scheduled for Aug. 3. The watchdog agency is likely to make its decision on the deal to create the world’s No. 7 carrier around October, airline industry sources in Seoul said.

“We have requested a deadline extension to render comprehensive remedies that can address the European Commission’s concerns, and the European Commission approved the request,” a Korean Air official said.

“We will soon submit a remedy package and finalize the discussion with the authority within the new deadline to get a final approval.”

The European Commission temporarily halted its probe of the 1.8 trillion won ($1.4 billion) deal on June 23, according to its website.

TOUGH STANCES

Korean Air’s request for the postponement came after the European Commission sent the airline a statement of objections to the deal in May.

In the statement, the antitrust regulator said that Korean Air’s proposed acquisition of Asiana could restrict competition in the markets for passenger and cargo air transport services between the European Economic Area and South Korea. The commission launched a full-scale probe into the takeover in February.

In the US, the Department of Justice, the country’s competition regulator, notified Korean Air of its decision to reject the purchase of Asiana if the deal leads to the creation of a dominant player with no formidable rival in South Korea's aviation industry, according to people with knowledge of the situation last month.

Earlier this month, Korean Air Chairman and CEO Cho Won-tae pledged to take all necessary measures to win approvals from the authorities.

The deal is under investigation by the US, the European Commission and Japan’s antitrust bodies. Meanwhile, 14 nations including South Korea, China, Australia, Singapore, Thailand and Vietnam have already given it the nod.

Write to Mi-Sun Kang at misunny@hankyung.com

Jongwoo Cheon edited this article.