DALLAS – The planned €1.31bn (US$1.4bn) merger between Korean Air (KE) and Asiana Airlines (OZ) has hit another snag after the European Commission (EC) sent a statement of objections which outlined its concerns over the tie-up.
These include the potential reduced competition in both passenger and cargo services “on four routes between South Korea and France, Germany, Italy and Spain,” with the merger potentially removing “an important alternative for customers.”
In February, the commission launched its investigation into the deal, announced by Korean Air in late 2020. Both KE and OZ provided internal documents while looking at the views of airline competitors and customers.
Every Effort to Secure the Merger
Korean Air said it would continue discussing resolutions to the EC’s concerns. “Korean Air is confident that the proposed merger will benefit our customers in the market and will make every possible effort to secure the final approval of the merger,” it said in a statement.
In March, the deal was given the green light by the UK’s Competition and Markets Authority (CMA) after KE offered “appropriate” remedies to the concerns raised. This included a new framework to offer slots allowing competitors to access routes between Seoul and London. Virgin Atlantic (VS) became the beneficiary of the news, committing to launching a new daily service between the two city pairs.
The EC now has until August 3, 2023, to make its final decision on the merger.
Featured Image: Korean Air (HL8249) Boeing B737-900ER. Photo: Jinyuan Liu/Airways.