Korean Air Lines expects EU antitrust regulators to issue a formal warning about its bid for Asiana Airlines by the end of May, South Korea's biggest carrier said on Friday, raising yet another hurdle for a major deal in the aviation industry. The deal announced in late 2020 in which Korean Air would become the biggest shareholder in indebted Asiana is the biggest shake-up in the country's aviation industry in nearly three decades.
The European Commission in February opened a full-scale investigation into the acquisition on concerns that it could reduce competition in passenger transport services on four routes between South Korea and Europe. Sources have told Reuters the four routes are to Barcelona, Frankfurt, Paris and Rome. "The European Commission (EC) has not made any official announcement about its issuance of a statement of objections (SO)," a Korean Air spokesperson told Reuters in an email.
"However, the issuance of an SO is a common practice in a Phase 2 merger review, and discussions with the EC will continue. We expect that the EC will issue an SO at the end of May." Such a document or charge sheet allows the EU competition enforcer to set out potential anti-competitive issues arising from the deal.
The Commission, which has set an Aug. 3 deadline for its decision, declined to comment. Companies can ask for a closed hearing on receipt of a statement of objections before offering remedies.