The competition authorities of the European Union (EU) have expressed their second refusal to grant approval for the proposed merger between Korean Air and Asiana Airlines. Korean Air has made investments exceeding 100 billion won over the past two years towards the merger with Asiana Airlines, yet the final decision regarding the acquisition and merger remains uncertain.
In the interim inspection report (SO, Statement of Objection) released today, the EU competition authorities stated concerns about potential price increases and a decline in service quality in the passenger and cargo transport markets across four routes connecting Korea, France, Germany, Spain, and Italy.
This report is a part of the mid-term inspection process, requiring Korean Air to submit a response. By June, Korean Air needs to propose measures that alleviate concerns related to competition restrictions.
A representative from Korean Air stated, “The issuance of the interim inspection report (SO) by the EU competition authorities is a standard procedure conducted in accordance with the regulations for the second-stage merger review. We will continue to engage in discussions with the EU authorities to address concerns. We are committed to submitting a response that tackles the concerns of the EU authorities and taking proactive measures to obtain final approval.”
Following a review of Korean Air’s measures and other factors, the EU competition authorities plan to make a conditional decision regarding the approval of the merger by August 3.
To secure merger approval, Korean Air is exerting efforts by operating five teams comprised of both domestic and international law firms and over 100 economic analysis experts. However, it is expected to face numerous challenges in resolving issues that may hinder the final acquisition and merger, in addition to obtaining approval from the EU competition authorities.
The future of Korean Air and Asiana Airlines is once again becoming uncertain.
By Jungchanlee/Korea Travel News
The term “EU competition authorities” refers to regulatory bodies within the European Union that are responsible for enforcing competition laws and ensuring fair competition. These authorities are tasked with preventing anti-competitive practices, such as monopolies or cartels, and safeguarding the interests of consumers. In the context of the mentioned article, the EU competition authorities are evaluating the proposed merger between Korean Air and Asiana Airlines to determine its potential impact on competition in the relevant markets. They assess whether the merger could lead to negative outcomes, such as price increases or a decline in service quality, and make a decision on whether to approve or reject the merger based on these considerations.