Korean Air received a green light from the European Union's antitrust regulator on Tuesday, clearing a major hurdle in its long-anticipated acquisition of rival Asiana Airlines. The conditional approval, granted after months of negotiations, brings the South Korean flag carrier closer to finalizing the $1.4 billion deal, creating a combined aviation giant.
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However, the path to completion wasn't smooth. The EU watchdog initially expressed concerns that the merger could significantly reduce competition on some routes, particularly between South Korea and Europe. To address these concerns, Korean Air agreed to sell Asiana's global cargo freighter business and divest routes linking Seoul to Barcelona, Paris, Rome, and Frankfurt to budget carrier T'Way.
With the EU hurdle cleared, Korean Air now awaits the final decision from the US Department of Justice, the last major regulatory authority requiring approval. The airline has already secured greenlights from 13 other jurisdictions, indicating significant progress towards finalizing the mega-merger. This deal first announced in late 2020, holds significant implications for the South Korean aviation landscape. If finalized, it would create a powerhouse airline controlling nearly 80% of domestic passenger traffic and a substantial share of international routes. Industry analysts believe the merger could enhance operational efficiency and competitiveness for Korean Air on the global stage. However, some concerns remain regarding potential job losses and reduced consumer choice due to decreased competition.
While the future of the deal hinges on the US verdict, Korean Air expressed optimism, stating its intent to focus on negotiations with US authorities for timely completion. If successful, the merger could reshape the South Korean aviation industry and potentially impact the global market balance in the years to come.