Japan green lights Korean Air-Asiana merger

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Japan green lights Korean Air-Asiana merger

Published: 31 Jan. 2024, 15:45 Updated: 31 Jan. 2024, 18:17

SHIN HA-NEE
shin.hanee@joongang.co.kr

Korean Air and Asiana Airlines airplanes parked at Incheon International Airport on March 12 [YONHAP]

Japan’s antitrust regulator green-lit Korean Air’s acquisition of Asiana Airlines.

The merger has so far received approval from 12 of 14 competition authorities, with only the United States and the European Commission remaining.

Korean Air has been pursuing a merger with the country’s second-largest carrier since November 2020.

The largest airline in Korea submitted its intent for the deal to the Japan Fair Trade Commission (JFTC) in 2021. The regulator expressed concerns that the resulting entity's market share would limit competition for Korea-Japan routes, demanding the company submit a remedy.

Out of 12 routes that overlapped among Korean Air, Asiana and its subsidiaries, five were exempted from competition reviews. For the remaining seven, Korean Air decided to cede a “limited” number of timeslots to alternative players or "remedy takers," should any wish to operate them, which include routes like Seoul to Osaka, Sapporo, Nagoya and Fukuoka, as well as Busan to Osaka, Sapporo and Fukuoka.

The Japanese authorities also expressed competition concerns with the air cargo lines, but with the Korean carriers' recent decision to divest Asiana's cargo businesses, the JFTC narrowed its request to demanding Korean Air enter into a cargo block space agreement on select routes from Japan to Korea.

In November last year, the board of Asiana decided to give up its highly profitable cargo business, which accounts for 20 to 30 percent of its total income, after the European Commission expressed concerns that the merger could impede competition for passenger and cargo transport businesses operating between the European Union and Korea. The sell-off of Asiana's cargo unit will be completed after the merger is closed.

The European antitrust watchdog is likely to soon approve Korean Air's merger deal, Reuters recently reported, based on a set of remedies set by Korean Air to sell Asiana’s cargo arm and divest routes to four European cities in Barcelona, Frankfurt, Paris and Rome.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]