Korean Air-Asiana merger approved by Singapore regulator

Korean Air Lines' Boeing 787-9 [KOREAN AIR LINES]

Korean Air Lines has received unconditional approval from the Competition and Consumer Commission of Singapore (CCCS) for its merger with Asiana Airlines.

Singapore's antitrust regulator concluded Tuesday that the acquisition won't infringe the country's Competition Act.

In November 2020, Korean Air Lines signed a deal to acquire a 63.88 percent stake in Asiana Airlines and eventually merge with it, creating a global top 10 carrier in terms of routes. It has submitted documents to 14 countries to get approval for the merger and has received the go-ahead from seven, with Singapore being the latest.

The regulator said in its assessment that the merged entity will continue to face a high degree of competition from Singapore Airlines in both the passenger transport and air cargo transport markets.

Potential entry of new players is expected to constrain the soon-to-be-merged carrier's ability to raise ticket prices and prevent coordination between companies.

Korea's Fair Trade Commission is scheduled to hold a meeting Wednesday to review whether it will formally approve the transaction, with results expected a few days later.

It gave conditional approval to the merger last December, with the proviso that Korean Air Lines and Asiana Airlines relinquish rights on certain routes they dominate. The regulator said 10 routes will become monopolized once the two entities merge, including routes connecting Incheon with Los Angeles, New York, Barcelona, Phnom Penh, Seattle and Sydney.

Korean Air Lines aims to complete the takeover of Asiana Airlines next year and introduce the merged carrier in 2024. It is still awaiting approvals from seven jurisdictions, including the European Union, United States, Australia and Japan.

"In order to finalize the acquisition process as early as possible, Korean Air Lines will continue to proactively communicate and cooperate with the remaining regulatory bodies," said a spokesperson for Korean Air Lines.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]