Execution time2024-01-12 23:23
It appears that the corrective action plan for the ‘sale of Asiana cargo’ has been accepted… The official announcement is expected next month.
Korean Air-Asiana merger
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(Brussels/Seoul = Yonhap News) Reporter Lim Seong-ho, Reporter Bit-na Jeong = Reuters reported on the 12th (local time) that the competition authority of the European Union (EU) intends to give final approval to the business combination of Korean Air and Asiana Airlines.
The official announcement is expected to be made as early as the end of this month or next month, and once confirmed, only the final ruling by the US and Japanese competition authorities will leave Korean Air until the business combination has to complete.
Two sources familiar with the matter told Reuters that this decision follows Korean Air’s submission to the European Commission of remedial measures, including the sale of the Asiana cargo business and the return of slots (the number of airport take-offs and landings) on routes to four European cities.
Given these explanations, it appears that a conditional approval decision will be made on the premise of implementing the corrective action plan.
A local source told Yonhap News, “As far as I know, the EU Competition Directorate is currently drafting a decision containing the results of the business combination review.”
Once a draft decision has been prepared, a conclusion is reached in a meeting of the executive committee after gathering the views of the relevant directorates and consulting competition authorities from 27 member countries.
As the deadline for review originally set by the EU was February 14, taking into account the remaining procedures, it is expected to take several more weeks until the official EU announcement.
A Korean Air official said, “We have not officially received any issues from the executive committee yet, but we will do our best until final approval.”
The merger of the two airlines, which began in earnest with the Korea Development Bank’s announcement of a merger in November 2020, appeared to be going smoothly as Korean Air received approval from 11 of the 14 countries that reported the business combination in early last year, excluding the EU, the United States, and Japan.
However, in May last year, the EU hit an unexpected snag when it published a review report expressing concerns that competition for passenger and cargo transport on European routes could be reduced if a merger took place.
In response, Korean Air took a gamble by selling its cargo business, which accounts for more than 20% of Asiana’s sales, to overcome the EU’s screening threshold.
In November last year, Asiana Airlines’ board of directors approved a plan to separate and sell the cargo business, and Korean Air presented a corrective action plan to the executive committee early last month focused on selling the cargo business.
It is reported that four companies, including Air Premia, Eastar Jet, Air Incheon, and Jeju Air, have submitted letters of intent (LOI) to acquire Asiana’s cargo business division.
There is a strong possibility that T’way Air will take over the transport rights for the four European routes included in the corrective action plan.
disgleirio@yna.co.kr
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2024/01/12 23:23 Sent
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