LONDON – The Ministry of Commerce of the People’s Republic of China (MOFCOM) announced its approval of Korean Air’s business combination with Asiana Airlines on December 26.
As pat of the approval MOFCOM has demanded that the merged Korean Air-Asiana entity reduce its market share due to competition concerns.
To address this concern, Korean Air has submitted remedies proposing to transfer slots to any new airlines wishing to start air services on nine routes where both Korean Air and Asiana Airlines operate.
Five of the nine routes have been proposed by the Korea Fair Trade Commission (KFTC) earlier this year and an additional four routes have been advised by MOFCOM.
Korean Air expects MOFCOM’s approval of the business combination to play a positive role in the review process of the remaining competition authorities.
Currently, Korean Air is still waiting for business combination approvals from the U.S., E.U. and Japan, countries where reporting is mandatory, as well as the final approval from the U.K., where reporting is arbitrary.
The U.K.’s Competition and Markets Authority (CMA) has accepted remedies submitted by Korean Air, but will gather opinions from the market before giving their official approval.
Korean Air will continue to cooperate closely with the remaining competition authorities to ensure the review process is completed as soon as possible.
The airline submitted business combination reports to the nine countries that require reporting on January 14, 2021. Out of these nine countries, Korean Air has received approval from China, Korea, Turkey, Taiwan and Vietnam.
The Thailand Competition Commission announced that submission of a business combination report was not necessary.
From countries where reporting is arbitrary, Korean Air has received clearance from Singapore, Malaysia and Australia. The Philippines has confirmed that the business combination report was not required.
Asiana Airlines Inc. is a South Korean airline headquartered in Seoul. In 2019, it accounted for 25% of South Korea’s international aviation market and 20% of its domestic market.
The carrier maintains its international hub at Seoul’s Incheon International Airport, Gimhae International Airport in Busan and its domestic hubs at Gimpo International Airport, also in Seoul.
As a member of Star Alliance, it operates 90 international passenger, 14 domestic passenger, and 27 cargo routes throughout Asia, Europe, North America, and Oceania.
Asiana lists the following current network:
- Domestic: 10 cities, 11 routes
- International (Passenger): 21 countries, 64 cities, 74 routes
- International (Cargo): 11 countries, 25 cities, 22 routes
The airline also holds 100% share of Air Seoul, a subsidiary and its own low-cost carrier.