Still Awaiting Decision from US, Japan
The merger between Korean Air and Asiana Airlines, which has been dragging on for over three years, gained momentum by overcoming a significant hurdle. The European Union (EU) competition authorities, who had been rigorously reviewing the merger, have reportedly made a de facto approval decision.
If the two companies ultimately succeed in the merger, it will lead to the creation of a mega carrier with revenues exceeding 20 trillion won and a fleet of more than 200 aircraft.
According to the aviation industry on Jan. 15, the EU competition authorities are reportedly planning to grant conditional approval to the corrective measures submitted by Korean Air.
Citing local sources, Reuters reported that Korean Air’s corrective measures, which include selling Asiana Airlines’ cargo business and introducing alternative airlines on four European routes, are expected to receive conditional approval from the EU competition authorities. Although not officially announced by the EU, it is widely believed within the industry that the measures have effectively passed scrutiny.
Previously, the EU announced that it would provisionally conclude its review of the corporate merger between Korean Air and Asiana Airlines by Feb. 14, 2024. A Korean Air official stated, “Although we have not officially received any notification from the EU, we are committed to doing our best until the final approval process is completed.”
Currently, Korean Air owns 165 aircraft, while Asiana Airlines has 81. Even with the consideration of selling Asiana Airlines’ cargo business, the combined fleet will exceed 200 aircraft. Additionally, Korean Air is set to enhance its fleet with the introduction of new aircraft, including 30 units of B787, 25 units of B737-8, and 30 units of A321neo, positioning itself with a modern and diverse fleet.
Presently, Korean Air has received approval for its merger from 11 out of the 14 key countries. If it successfully clears the final hurdle of EU scrutiny, which has been considered the most significant challenge, the only remaining evaluations will be from the United States and Japan.
On the other hand, when combining the consolidated revenue and operating profit of Korean Air and Asiana Airlines for the previous fiscal year, the figures amount to 23.56 trillion won (US$17.74 billion) and 2.6 trillion won, respectively.