Korean Air and Asiana M&A Faces Resistance Abroad Over "Competition Concerns"

[Asia Economy Reporter Jang Sehee] As the merger and acquisition (M&A) process of Korean Air's acquisition of Asiana Airlines is taking longer than expected, some foreign countries have expressed the view that "unconditional approval is difficult" due to concerns that competition in overlapping routes between the two companies may be restricted.

On the 26th, according to the "Explanation Materials on the Prolonged Review of the Korean Air-Asiana Corporate Merger" received by Yoon Kwan-seok, a member of the Democratic Party of Korea, from the Fair Trade Commission (FTC), the FTC stated, "The reviews by major foreign competition authorities have not progressed much yet, and practically, there are opinions expressing concerns about competition restrictions."

The FTC explained, "Some countries in charge of the review have expressed concerns about competition restrictions on all overlapping routes between the two companies and, based on past cases, have indicated that unconditional approval is difficult."

This M&A requires approval from authorities in Korea, the United States, the EU, China, Japan, the United Kingdom, Singapore, Australia, and Vietnam.

Although it has not been disclosed which of these countries expressed concerns, considering that there are 67 overlapping routes based on international flights (6 in the Americas, 6 in Europe, 17 in China, 12 in Japan, 24 in Southeast Asia and Northeast Asia, 1 in Oceania, and 1 in India), it is highly likely to be China and Japan.

The FTC stated that since their corrective measures must not conflict with foreign actions, the process inevitably takes time.

In the explanation materials, the FTC said, "Due to the nature of the aviation industry between the two countries, it is necessary to minimize differences and potential conflicts in the timing and content of measures between countries through consultations with foreign authorities," adding, "Since the regulatory and review policies of each country differ, it is expected to be a very arduous task."

This content was produced with the assistance of AI translation services.