The European Union (EU) antitrust regulators have set a new deadline of February 14 to decide on the proposed acquisition of Asiana Airlines by Korean Air. This decision comes after Korean Air requested an extension to prepare "remedies" that can address the European Commission's (EC) competition concerns.
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The Merger
The merger plans were originally announced by the South Korean Government in 2020⁴. If approved, the deal would see Korean Air become the top shareholder of indebted Asiana, marking one of the first major aviation consolidations since the industry was hit by COVID-19.
The Concerns
The EC has expressed concerns that the proposed acquisition of Asiana may restrict competition in the markets for passenger and cargo air transport services between the EU and Korea. In response to these concerns, Korean Air has asked for more time to prepare a package of remedies.
The Remedies
While the specifics of the remedy package have not been disclosed, it is expected to address the EC's competition concerns. Korean Air has stated that they will soon submit the remedy package and finalize the discussion with the EC within the new deadline.
The Decision
The EU competition enforcer can clear the deal with or without remedies, or it can open a full-scale investigation after the preliminary review if it has serious concerns. The decision is now expected to be made by February 14.
The Impact
The outcome of this decision could have significant implications for the aviation industry. If approved, the merger would result in a major consolidation in the industry, potentially impacting competition and consumer choice.
The Future
As the new deadline approaches, all eyes will be on the EU regulators and the future of Korean Air and Asiana Airlines. The decision could set a precedent for future mergers and acquisitions in the aviation industry.
