DALLAS – Approval for the merger of Korean Air (KE) and Asiana Airlines (OZ) has hit another hurdle after EU regulators announced that it would open a full-scale investigation into the tie-up.
The European Commission said that it is worried that the merger would impact competition on routes between Seoul and several European destinations. It is specifically focusing on four routes from Seoul – Barcelona (BCN), Frankfurt (FRA), Paris (CDG) and Rome (FCO), where both KE and OZ operate. CDG and FRA both have competition from Air France (AF) and Lufthansa (LH), respectively. However, BCN and FCO have no other operators.
EU Concerns
In a statement, the commission said, “The transaction could reduce competition in the provision of passenger transport services on four routes between South Korea and the EEA (European Economic Area).” It also added its concerns that cargo transportation could also be affected.
EU authorities now have until July 5 to decide if they can clear or block the deal. This deadline could be extended should the airlines offer solutions to address the concerns, which, so far, neither KE nor OZ have done.
Korean Air Confident
“Korean Air is confident that our merger will benefit our customers in the market, and will continue to communicate with the European Commission and submit our remedies to address their concerns,” the airline said in a statement.
UK authorities will also have to look at the competition between London Heathrow (LHR) and Seoul, as KE and OZ are currently the only two operators on the route.
Featured Image: Korean Air Airbus A380-861 (HL7628). Photo: Luca Flores/Airways.
