Planes of Korean Air Co. and Asiana Airlines Inc. are seen on the tarmac at Incheon International Airport, west of Seoul, in this file photo taken Nov. 2, 2023. (Image courtesy of Yonhap)
SEOUL, Nov. 21 (Korea Bizwire) — The European Union has concluded the passenger service-related remedial commitments offered by South Korean flagship carriers Korean Air Co. and Asiana Airlines Inc. for their proposed merger have been fulfilled, according to the EU’s executive body Thursday.
Korean Air has divested four European passenger flight routes to low-cost carrier T’way Air Co. as part of a conditional approval for the merger offered from the European Commission (EC) in February. Korean Air has also agreed to sell Asiana’s cargo business to Air Incheon Co. as part of remedies.
In a statement sent to Yonhap News Agency, Lea Zuber, EC spokesperson for competition, said the commission concluded Friday (Brussels time) that T’way Air “has fulfilled the completion condition for the passenger commitments set out in the conditional approval decision.”
The conclusion was reached based on a report by a monitoring trustee, she said.
A final EC approval for the Korean Air-Asiana merger deal, however, remains pending, according to the spokesperson, as the EC “is currently assessing” Air Incheon’s proposed purchase of Asiana’s cargo business division.
“The closing of the transaction between Korean Air and Asiana Airlines remains conditional upon the commission’s approval of a suitable buyer for the cargo divestiture business,” the spokesperson said. “We cannot prejudge its timing or outcome.”
On the passenger route transfer to T’way Air, the EC concluded that the budget carrier has met the requirements of operating “a certain number of services on each of the four remedy routes,” connecting Incheon, South Korea’s main gateway, with Frankfurt, Paris, Rome and Barcelona, for a certain period of time.
T’way has also fulfilled its requirement to sell tickets for future services on the routes for two upcoming International Air Transport Association seasons, or until October 2025, according to Zuber.
Many aviation industry watchers in South Korea had said they expected the EC to make a final decision on the 1.8 trillion-won (US$1.4 billion) merger deal within November.
The latest EC statement suggests that a final EU approval may come at a later time.
Korean Air has so far won approval from 12 countries and regions, and is waiting for final approval from the EU and the United States.
A spokesperson at the U.S. Department of Justice (DOJ) responsible for reviewing antitrust matters in America, meanwhile, said Tuesday the department “will decline to comment” when asked by Yonhap of the department’s review into the merger deal.
The DOJ had reportedly considered opening a lawsuit to block the deal over competition issues in the U.S. market.
To address monopoly concerns regarding U.S. routes, Korean Air has taken proactive measures, such as expanding its code-sharing partnership with Air Premia for North American routes.
“Korean Air will continue to communicate closely with the relevant authorities to secure approval from the remaining regulatory bodies, including the DOJ,” a Korean Air spokesperson told Yonhap News Agency last week.
In November 2020, Korean Air signed the deal to acquire a controlling stake in Asiana to create the world’s 10th-biggest airline by fleet.
The nation’s two full-service carriers account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, west of Seoul.
(Yonhap)
