UK antitrust body delays Korean Air/Asiana merger decision

The UK's Competition and Markets Authority (CMA) has said it needs more time to make a decision about the Korean Air merger with Asiana Airlines. In a January 26, 2023, statement - the date the antitrust body was due to make a decision, the CMA said it would now decide by March 23.

The issue at hand is whether the CMA will accept undertakings provided by Korean Air after saying in mid-November that it had serious reservations about the proposed merger. However, by the end of that month, the airline had provided the CMA with a series of undertakings that included making slots available at London Heathrow and Seoul Incheon to Virgin Atlantic to allow it to start flying on the UK-South Korea country pair or facilitate entry by other carriers. At the time, the CMA said these undertaking lessened their concerns about the merger causing a lessening of competition.

However, in its statement, the CMA now says that "the undertakings involve the approval by the CMA of a proposed remedy taker and the terms of entry of that remedy taker. A further reason (for the extension) is that material engagement with third parties, including the proposed remedy taker, has been required. Accordingly, the CMA considers that there are special reasons for the extension."

A Korean Air spokesperson told ch-aviation that they expect the CMA to complete their review on or before the new deadline. "We will continue to cooperate with all authorities involved to ensure that the review is completed at the earliest opportunity," the spokesperson said.

Neither British Airways or Virgin Atlantic operate on the UK - South Korea country pair, but Korean Air and Asiana do, with the market evenly split between them. However, if the merger proceeds as planned, Korean Air will acquire a majority stake in Asiana and that operator will cease to exist, leaving just one airline on the country pair. British Airways ended its flights to Seoul early in the pandemic and is yet to reschedule services.

The CMA says that the extension will not materially increase the risk of an anti-competitive outcome from the merger and notes that "there is a sufficient likelihood that it will be able to accept the undertakings before the end of the extended period."