Britain voices monopoly concerns regarding Korean Air Lines, Asiana integration

A Korean Air Lines' flight takes off from Incheon International Airport [KOREAN AIR LINES]

Britain's antitrust regulator expressed concerns over Korean Air Lines’ acquisition of Asiana Airlines, requesting additional measures to ensure market competition.

In a statement released Monday, the Competition Markets Authority (CMA) said the merger could lead to higher ticket prices for passengers and reduced quality of service considering Korean Air Lines and Asiana Airlines are the only carriers operating direct passenger flights between London and Seoul.

The CMA noted that there are other carriers offering indirect passenger flights between London and Seoul using layovers. However, it said those routes are a much less attractive option for customers, and will give dominance to the merged entity.

The CMA also said that the merger will affect competition of air cargo transport.

It said Korean Air Lines and Asiana Airlines are the two main suppliers of direct cargo services between Korea and the United Kingdom, expressing concerns that the merger could raise air cargo rates for British businesses trying to transport cargo to Korea.

In response to those concerns, Korean Air Lines will submit new proposals to the CMA by Nov. 21, proposing additional remedies so the merger will not hurt competition in the U.K. airline market.

The proposals will be reviewed by the CMA until Nov. 28. If accepted, the CMA will give approval to the merger. If not, the merger will have to go through an additional in-depth Phase 2 investigation.

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

Korean Air Lines hopes to complete the acquisition next year and introduce the merged carrier in 2024. It is still awaiting approvals from five jurisdictions such as the European Union, the United States, China, Japan and the United Kingdom.

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