[Exclusive] Korean Air-Asiana Likely to Receive Conditional Merger Approval Within the Year... Adjustment of Monopoly Routes

Agreement to Reduce Market Share Below Half
LA and Frankfurt Among Leading Candidates
Guarding Against Damage to Future Competitiveness

Regarding the monopoly issues on certain routes identified as obstacles to the merger of Korean Air and Asiana Airlines, it has been decided to reduce the market share to below 50%. All routes where the combined market share exceeds 50% will be subject to adjustment review, including many prime routes in North America and Europe such as Los Angeles (LA) and Paris.

According to the aviation industry on the 1st, the Fair Trade Commission has decided to conditionally approve the corporate merger within this month, subject to route market share adjustments.

According to the Ministry of Land, Infrastructure and Transport, monopoly routes based on flight frequency after the merger include Kathmandu, Milan, Zurich, Venice, Zagreb, and Los Angeles, while routes where the market share exceeds 50%, including foreign airlines, are Ulaanbaatar, Rome, Paris, Delhi, and Mumbai. Additionally, the industry recognizes that Frankfurt, Barcelona, and New York also have overlapping route market shares exceeding 50% after the merger.

Among these, lowering the market share on some routes in North America and Europe is being strongly considered as a priority. Routes such as Los Angeles and Frankfurt are representative examples. It is also known that KCGI, a private equity fund and one of the major shareholders of Hanjin KAL, and the Bando Group have recently expressed support for this plan. However, their basic stance is that the reduction of traffic rights and slots should not go so far as to damage the company’s future competitiveness.

Lee Dong-gul, Chairman of the Korea Development Bank, stated at an online press conference the day before, "If traffic rights are reduced or slots cut to the extent that future competitiveness is harmed, it may become difficult to maintain employment and enhance competitiveness based on maintaining business volume." He added, "We expect appropriate measures that can preserve jobs for aviation industry workers and realize the purpose of the merger, which is to enhance and restore the competitiveness of the domestic aviation industry."

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