Hurdle for Asiana/Korean Air Merger as UK Regulators Raise Concerns

DALLAS - UK competition regulators have raised concerns over the merger of Asiana Airlines (OZ) and Korean Air (KE) regarding the potential of higher airfares for passengers and the impact on cargo operations.

The two airlines have until November 21 to submit proposals to the UK’s Competition and Markets Authority (CMA) to address these concerns. The CMA will then embark on a “more in-depth investigation if they are not resolved.”

Aussie Approval

A merger between the two South-Korean airlines was first announced in November 2020. Since then, several bodies have granted regulatory approval, including the Australian Competition and Consumer Commission (ACCC). In September, ACCC Chairperson Gina Cass-Gottlieb said the deal could go ahead as Qantas (QF) and Jetstar (JQ) would shortly be commencing flights between Seoul and Sydney.

However, the combined carriers would be the only airline offering direct flights between Seoul and London after British Airways (BA) cut the route during the pandemic.

CMA Senior Mergers Director Colin Raftery said, ”Korean Air and Asiana Airlines are the two main players on the London to Seoul route and the deal risks UK customers and businesses paying over the odds or receiving a lower quality of service.”

US Approval Pending

Approval still needs to be given by US regulators. Management hoped these would be granted by the end of 2022 to move the merger forward.

In June, KE CEO Walter Cho spoke of his expectations of opposition against the two companies coming together, “We weren’t expecting it to be easy because Asiana and Korean Air were basically 100% of the international market, especially in long-haul. And with the US and EU, I expected there to be some issues. However, we are on track.”

Featured Image: Korean Air will keep its name after the merger with Asiana. Photo: Liam Funnell/Airways.