DALLAS – Following the European Commissions (EC) announcement that it would be sending a statement of objection to the proposed merger of Korean Air (KE) and Asiana Airlines (OZ), the US Department of Justice (DOJ) has revealed that it is considering filing a suit to block the proposed tie-up.
In a similar vein to the EC’s concerns, the DOJ has said that the deal could harm competition on trans-Pacific routes. This would cover both passenger and cargo operations, notably the transportation of critical goods such as microchips, which could subsequently affect supply chain resilience.
It has been investigating the proposed merger since 2020. And while the DOJ has no final say in the deal, it can still block the agreement based on harming competition in the United States. Currently, KE and OZ both fly to San Francisco (SFO), Los Angeles (LAX), Seattle (SEA), New York (JFK) and Honolulu (HNL).
The administration, under the guidance of US President Joe Biden, has been against consolidation in the airline sector. It has recently raised concerns over the proposed US$3.8bn acquisition of Spirit Airlines (NK) by JetBlue (B6) and the latter’s Northeast alliance with American Airlines (AA).
In a statement made to Reuters, Korean Air said that it had “made, and continues to make, every effort to obtain all necessary approvals.” It added that it would continue conversations with the country’s government until a final decision is made.
Eleven other authorities have so far approved the merger, including Australia, the UK and China.
Featured Image: Asiana Airlines (HL7641) Airbus A380-841. Photo: Luca Flores/Airways.