US and UK antitrust authorities are expected to approve the merger between Korean Air (KE, Seoul Incheon) and Asiana Airlines (OZ, Seoul Incheon) next month, sources familiar with the matter told local media. US Department of Justice officials are due to interview Korean Air executives this month about the issue and the UK Competition and Markets Agency (CMA) is expected to announce its decision in mid-November.
According to The Korean Times, Korean Air is hoping that a favourable decision from the UK and US authorities will encourage the European Union, China, and Japan to also greenlight the deal. Korean Air's acquisition of Asiana was announced back in November 2020 and the flag carrier has been negotiating with antitrust authorities in jurisdictions the two airlines fly to ever since. Korean Air said the KRW1.8 trillion won (USD1.6 billion) deal will give it the ability to compete with "global mega airlines."
In order to help lessen competition concerns, Korean Air is reportedly in talks with several airlines, including foreign carriers and domestic LCCs, about establishing another South Korean carrier to fill the Asiana void. The airline has signed agreements with low-cost operators to take over some Asiana-operated routes to Europe and the US and is negotiating with Vietnam Airlines (VN, Hanoi Noi Bai International) to take over some intra-Asian routes, according to reports. Meanwhile, Delta Air Lines (DL, Atlanta Hartsfield Jackson) and United Airlines (UA, Chicago O'Hare) are eyeing some of the airline's US routes.
Decisions from the EU and Japan will take longer, with the preliminary consultation stage only just underway. EU antitrust authorities often take a hard line on mergers resulting in potential monopolies, especially outside Europe, and gaining EU approval is expected to be the biggest merger challenge that Korean Air faces.
