U.S. to give final approval on Asiana merger: Korean Air president

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U.S. to give final approval on Asiana merger: Korean Air president

Published: 20 May. 2024, 17:30 Updated: 20 May. 2024, 18:09

SARAH CHEA
chea.sarah@joongang.co.kr

Korean Air President Woo Kee-hong delivers speech at an event in central Seoul, in June. [YONHAP]

Korean Air Lines' president remains positive regarding the company's takeover of Asiana Airlines, which is currently waiting for its last approval from the United States.

"It's a step considered tantamount to a complete approval of Korean Air's merger with Asiana, as I believe the U.S. Justice Department would not contemplate legal action [to block the takeover]," Korean Air Lines President Woo Kee-hong said to JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, on Friday.

It's the first time a Korean Air executive has remarked on the process of the proposed merger.

The merger, initiated in November 2020 and now in its fourth year, only awaits approval from the United States among the 14 mandatory reporting countries.

"We are in close talks with the Justice Department, and Woo's remark came from wide anticipation that the screening will proceed in the affirmative," a Korean Air spokesperson explained.

Woo also added he expects "good results on the sale of Asiana's cargo business as it is currently proceeding smoothly with multiple bidders."

Asiana Airlines decided to sell its cargo business, which is valued at around 1 trillion won ($740 million), last year, responding to the European Commission's concerns over the potential monopolization of European cargo routes after the merger.

Three local budget carriers — Air Premia, Eastar Jet and the cargo-focused Air Incheon — participated in the final bidding, with UBS as the lead manager.

The preferred bidder is expected to be announced as early as this month, after a thorough review on the bidding price and plans to raise the needed funds.

T’way Air, a Korean low-cost carrier, is preparing to take over four European routes — Frankfurt, Barcelona, Rome and Paris — from Asiana as part of remedial measures to address competition concerns from the proposed Korean Air merger.

Meanwhile, Korean Air promised its employees a bonus of up to 50 percent of its annual incentives upon the proposed merger's final approval.

Korean Air shares closed flat at 21,700 won on Monday.

BY PARK YOUNG-WOO, SARAH CHEA [chea.sarah@joongang.co.kr]