Korean Air Wins EU’s Approval for $1.4 Billion Asiana Deal

Since the transaction was notified to the European Commission on 13th Jan 2023, there is finally a big update on the Asiana Airlines acquisition with Korean Air winning the EU’s approval. This comes after the Commission had concerns that the transaction, as initially notified, would harm competition in the markets for:

  • Air cargo transport services between Europe and South Korea, and
  • Passenger air transport services on routes between Seoul and certain European destinations, specifically Barcelona, Paris, Frankfurt, and Rome.

To address the Commission’s competition concerns, Korean Air offered the following remedies:

Cargo commitments:

Korean Air will divest Asiana’s global cargo freighter business. The divestment includes freighter aircraft, slots, traffic rights, flight crew, and other employees, as well as customer cargo contracts, among others. Korean Air can only implement the acquisition of Asiana following the Commission’s approval of a suitable buyer for the cargo divestment. Among other requirements, the buyer must be able and have the incentives to operate the divested business in a viable manner and to compete effectively with the merged company.

Passenger commitments

Air will make available to rival airline T’Way the necessary assets to enable it to start flight operations on the four overlap routes. The assets include slots and traffic rights as well as access to the required aircraft. T’Way is a South Korean airline with a hub in Seoul from where it operates a network of routes in East Asia and beyond. Korean Air has committed not to complete the merger until T’Way has started operating on the four overlap routes.

Sources used and for your further reading:
https://www.bloomberg.com/news/articles/2024-02-13/korean-air-wins-eu-s-approval-for-its-1-36-billion-asiana-deal?embedded-checkout=true

Picture: The Historical Momentum behind the Korean Air-Asiana Airlines Merger—New Approach, Same Conclusion - Korea Economic Institute of America

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