[2022 National Audit] "Concerns Over Giving Up 69 Weekly US and Europe Flights if Korean Air and Asiana Merge" (Comprehensive)

"Majority of Abandoned Routes Taken by Foreign Airlines"
Korean Air: "We Are Not Abandoning These Routes"

[Asia Economy Reporter Kiho Sung] An analysis has emerged that, due to the merger of Korean Air and Asiana Airlines, 69 weekly flights on routes to Europe, the Americas, and Australia must be handed over to other airlines. It is expected that most of the routes Korean Air relinquishes will be taken over by foreign carriers. However, Korean Air maintains that if airlines wishing to enter the market cannot obtain slots (airport arrival and departure times), the merged airline will provide slots, and this does not mean they are giving up operation of those routes.

On the 6th, the office of Park Sang-hyuk, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party, analyzed the number of flights requiring replacement on long-haul routes after the merger of Korean Air and Asiana Airlines. According to the analysis, out of 183 weekly flights operated by the two airlines on Europe, Australia, and Americas routes (based on 2019 data), 69 flights must be operated by other airlines.

This is because, to pass the corporate merger review by regulatory authorities in each country, the route market share must be lowered to below 50%, which is the general standard for monopoly and oligopoly.

Korean Air and Asiana Airlines operate the Incheon-Paris route 12 times a week, with a market share of 60%. To reduce the share below 50%, they must give up 3 weekly flights. Additionally, on routes with market shares of 68% for Frankfurt, 75% for Rome, 66% for London, and 100% for Barcelona, they must hand over 4, 3, 4, and 4 weekly flights respectively to replacement airlines.

On the Americas routes, 44 weekly flights must also be operated by replacement airlines.

They must give up 11 weekly flights on the Incheon-New York route with 100% market share, 2 flights on Seattle with 64%, 14 flights on LA (Los Angeles) with 100%, 7 flights on San Francisco with 69%, and 10 flights on Honolulu with 83%.

However, Korean Air states that this does not mean they are giving up operation of these routes. A Korean Air representative explained, "The Korea Fair Trade Commission has already thoroughly analyzed overlapping routes of the two airlines and imposed structural corrective measures such as slot returns on 26 international routes and 8 domestic routes to reduce the merged airline's market share, as well as behavioral corrective measures including price controls and supply maintenance obligations until the implementation date." They added, "It is meaningless to discuss airline market share simply based on passenger numbers on all routes."

They continued, "To maintain a competitive environment after the merger, entry conditions for domestic airlines have been prepared on major medium- and long-haul routes, and active discussions are underway with domestic LCCs that already have intentions to operate long-haul flights. However, considering that domestic LCCs do not yet have sufficient aircraft capable of long-haul operations, we are also discussing the possibility of route entry with foreign airlines to complement this."

A Korean Air representative stated, "We plan to make our best efforts to strengthen the global competitiveness of the merged airline, promote the healthy growth of the domestic aviation industry, and enhance consumer benefits."

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