The European Commission has informed Korean Air of its preliminary view that its proposed acquisition of Asiana Airlines may restrict competition in the markets for passenger and cargo air transport services between the European Economic Area (EEA) and South Korea.
Korean Air and Asiana are respectively the first and second largest airlines in South Korea. They operate a network of domestic and short-haul routes in Asia as well as long-haul routes between South Korea and the rest of the world.
In February 2023, the European Commission opened an in-depth investigation and has since conducted a wide-ranging investigation to understand the potential impact of the deal.
As a result, the EC says it is concerned that the merger will reduce competition in the provision of passenger transport services on four routes between South Korea and France, Germany, Italy and Spain.
The EC notes that Korean Air and Asiana compete head-to-head in carrying passengers and cargo between the EEA and South Korea.
“Together, they would be by far the largest carriers of passengers and cargo on these routes and the merger may remove an important alternative for customers. Other competitors face regulatory and other barriers to expanding their services and may be unlikely to exert sufficient competitive pressure on the merged entity. The merger may therefore lead to increased prices or decreased quality of passenger and air transport services.”
Both Asiana and Korean Air have their hubs at Seoul’s Incheon International Airport.
Korean Air is a member of the SkyTeam alliance, while Asiana belongs to Star Alliance.
The two airlines largely operate the same routes, including to Heathrow, CDG, Rome and Frankfurt.
Earlier this year, the UK’s Competition and Markets Authority (CMA) gave the Asiana-Korean merger its approval following a process that lasted over two years.
In its March 1 ruling, the CMA said it was satisfied that undertakings by Korean Air were appropriate to “remedy the substantial lessening of competition”. These included making slots available to Virgin Atlantic to operate between Heathrow and Incheon.
