European Union Approves Korean Air-Asiana Merger

The European Union approved Korean Air’s (KE) US$1.1 billion takeover of Asiana Airlines (OZ), merging Korea’s two full-fledged carriers. This clears regulatory hurdles for the four-year deal, creating the world’s seventh-largest carrier.

Korean Air received the green light after fulfilling EU conditions. It gained approval from 13 out of 14 countries, except for a pending review by the United States.

The U.S. Department of Justice typically considers legal action only if concerned about a merger’s potential monopoly. It hasn’t launched any, which the industry believes is a positive sign.

The EU’s approval came nine months after the European Commission granted conditional approval in February. KE sold OZ's cargo business and transferred four overlapping European passenger routes to a domestic low-cost carrier, T’way Air.

Korean Air and Air Incheon

Korean Air and Air Incheon (KJ) signed a legally binding agreement in August to sell OZ's freight business for 470 billion won (US$337 million). KJ plans to start the cargo business in July 2025.

The South Korean flag carrier proposed 1.5 trillion won for the takeover, having already paid 700 billion. It will pay the remaining 800 billion by December 20 to acquire 64 percent and become the largest stakeholder.

Korean Air will keep Asiana as a subsidiary for two years before fully subsuming it. During this period, the two airlines will exchange employees. However, the merger is taking longer than others, with some reporting due to the size of the deal may be the main reason. The merged entity will generate 20 trillion won in annual sales, making it the world’s seventh-largest carrier. It’ll have a workforce of 30,000 and 230 aircraft.

Korean Air has recently signed contracts for new aircraft, including Boeing 777-9 and 787-10 planes. It plans to introduce 33 Airbus A350 planes and 50 A321neo aircraft, expanding its fleet over the next dacade.