Sunday, June 4, 2023

Merger of Korean Air and Asiana, opposed by the United States and Europe

Korean Air has made an offer to acquire Asiana Airlines, which is running into financial difficulties. However, it has faced resistance from the European Union and the US Department of Justice, which oppose the merger, arguing that it could replace competition on routes between their jurisdictions and South Korea.

In November 2020, Korean Air paid $1.624 million to acquire Asiana. In December 2022, Chinese authorities approved the merger, although the Chinese Ministry of Commerce (MOFCOM) required Korean Air and Asiana to reduce their market share to reduce competition concerns.

European Union antitrust regulators have concluded that the merger of Korean Air and Asiana could hinder competition in passenger and cargo air transport services between Europe and South Korea, Reuters reported. They have consulted with rival airlines and customers about the potential impact of the merger.

US Justice Department considering legal action against Korean Air

For its part, the US Justice Department is considering legal action against Korean Air to block its acquisition of Asiana Airlines. He has been investigating the merger for two years, and his main concern is that it could stifle free competition in the airline market between the US and South Korea.

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Korean Air has responded to these concerns in a statement: “Korean Air is confident that the proposed merger will benefit our customers in the market and will make every effort to secure final approval of the merger.”

If it goes through, the merger between the two main South Korean airlines would make Korean Air the main shareholder of the heavily indebted Asiana. Asiana’s creditors, led by state-owned Korea Development Bank, agreed to the deal in 2020.

World Nation News Desk
World Nation News Desk
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