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Korean Air receives China’s approval for its merger with Asiana Airlines two years after the national flag-carrier announced its buyout of Asiana
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China’s Ministry of Commerce gave its consent on December 26 last year after demanding that the merged entity reduce its market share due to competition concerns
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Korean Air still awaiting clearance from the United States, European Union, and Japan, as well as final approval from the United Kingdom
China has approved Korean Airlines’ merger with fellow South Korean carrier Asiana Airlines, taking the union a step closer to completion two years after the national flag-carrier announced its acquisition of Asiana.
Korean Air said in a press release that the approval was granted by the Ministry of Commerce of the People’s Republic of China (MOFCOM) on December 26, 2022. But the ministry demanded that the new Korean Air-Asiana entity will reduce its market share due to competition concerns.
The airline said it is still awaiting clearance from regulators in the United States, European Union, and Japan, as well as final approval from the United Kingdom’s Competition and Markets Authority, which is gathering market opinion on remedies Korean Air has submitted.
Asiana, a founding member of the SkyTeam airline alliance, operates 90 international passenger, 14 domestic passenger, and 27 cargo routes in Asia, Europe, North America, and Oceania.
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Korean Air, a member of Star Alliance, submitted remedies proposing to transfer slots to any new airlines wishing to start air services on nine routes to China where both Korean Air and Asiana Airlines operate.
Five of the nine routes were proposed by the Korea Fair Trade Commission (KFTC) earlier this year and an additional four routes were advised by MOFCOM.
The KFTC proposed three routes from Seoul to Zhangjiajie, Xi’an and Shenzhen, and two routes from Busan to Qingdao and Beijing. MOFCOM added four routes from Seoul to Beijing, Shanghai, Changsha and Tianjin.
Korean Air expects that MOFCOM’s approval of the business combination to play a positive role in the review process of the remaining competition authorities.
Chairman and chief executive Walter Cho, in his New Year’s address to Korean Air staff on January 2, said the airline will continue to cooperate closely with the remaining competition authorities to ensure the review process is completed as soon as possible.
“2023 is a pivotal year for completing the huge task of closing our acquisition of Asiana Airlines. We are in the last stage with the remaining overseas competition authorities reviewing the merger,” Cho said.
Cho stressed the importance of gaining a competitive edge as the aviation industry return to normal in the post-Covid-19 era.
“We’ve seen a glimpse of normalization and the airports are beginning to bustle with passengers we have missed dearly,” the CEO said as he urged the team to more fully understand customers’ needs and keep up with market demands.
“We need to identify in advance our customers’ preferred destinations and services, and analyze when and where to add operations as well as which services to enhance.”
The airline submitted business combination reports on January 14, 2021 to the nine countries that require reporting. Korean Air has now received approval from China, Korea, Turkey, Taiwan, and Vietnam.
The Korean Air Asiana merger has also received clearance from Singapore, Malaysia, and Australia, countries where reporting is arbitrary.
Thailand and the Philippines said they do not require a business combination report.
