Japanese Authorities Approve Korean Air and Asiana Airlines Merger... Only US and EU Approvals Pending (Update)

Partial Transfer of Slots on 7 Korea-Japan Passenger Routes Requested to LCCs and Others

Japanese competition authorities have approved the corporate merger between Korean Air and Asiana Airlines.

Korean Air announced on the 31st that it had obtained corporate merger approval related to the acquisition of Asiana Airlines from the Japan Fair Trade Commission (JFTC). With this, approvals have been completed in 12 out of the 14 countries requiring merger approval, excluding the United States and the European Union (EU).

Previously, in January 2021, Korean Air submitted explanatory materials to the Japanese competition authorities and conducted economic analysis and market research, then submitted a draft notification in August of the same year. Since then, it has continuously engaged in prior consultations regarding various remedial measures.

During this process, the JFTC expressed concerns about competition restrictions due to increased market share on Korea-Japan routes if Korean Air, Asiana Airlines, Jin Air, Air Busan, and Air Seoul were merged, and requested related remedial measures.

Accordingly, Korean Air excluded 5 out of 12 Korea-Japan passenger routes where the airlines’ operations overlapped and where there were no competition concerns. Furthermore, for four Seoul routes (Seoul-Osaka, Sapporo, Nagoya, Fukuoka) and three Busan routes (Busan-Osaka, Sapporo, Fukuoka), Korean Air agreed to transfer some slots to domestic low-cost carriers (LCCs) and new entrant airlines upon request to operate on those segments.

Japanese competition authorities also expressed concerns about competition restrictions on Korea-Japan cargo routes. However, due to the decision to sell Asiana Airlines’ cargo aircraft business division, no additional remedial measures were required except for the conclusion of a cargo supply usage agreement (BSA) for certain routes from Japan to Korea. The sale of Asiana Airlines’ cargo aircraft business division will proceed after obtaining approvals from all remaining competition authorities and after Asiana Airlines is incorporated as a subsidiary.

Korean Air views the JFTC’s approval of the corporate merger as more significant than approvals from other essential notification countries. A Korean Air official stated, "Japan is geographically the closest country to the Republic of Korea and is a nation fiercely competing for the status of a Northeast Asian hub airport. Since the Japanese competition authorities, where such a sensitive issue is at stake, have approved the merger of the two companies, we expect this approval to have a positive impact on the pending approval decisions from the United States and the EU."

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