History
In November 2020, the government of Korea proposed the combination of Korean Air and Asiana to create a national champion carrier and rescue Asiana, which was ailing at the time.[2]
For the merger to proceed, antitrust approval was necessary from competition authorities in key markets for the carriers. In 2021, the merger was given approval by the Department of Justice in the United States, an essential market for the carrier, pending submission and review of further remedies from the carrier.[18] In February 2023, it was confirmed that the merger would not proceed without approval from European Union and United States authorities. At the time, the Korean government did not view approval in the EU and US as likely. Backup plans such as an equity investment from foreign backers (with the UAE-based Mubadala Investment Company suggested) into Asiana to help it remain viable were being explored.[19]
In May 2023, it was reported that the United States Department of Justice was considering filing suit to block the merger as anticompetitive.[20] By June 2023, the merger was viewed as increasingly unlikely given the regulatory headwinds.[21]
In August 2023, the Korea Economic Daily reported that the Korean Development Bank was seeking a plan B in preparation for the proposed merger's collapse.[22] This was due to a rising belief that American and European authorities would block the consolidation. On September 27, 2023, Yonhap reported that Korean Air had submitted an amended application to the European Commission, proposing divestment of Asiana's cargo division and giving up slots at some EU airports, including Barcelona, Rome, Paris, and Frankfurt to satisfy competition concerns.[23][24]
As of February 2024, authorities in one essential market, the United States, had yet to approve the merger.[25] After Korean Air switched to a new plan that consisted of acquiring a 63.88% stake of Asiana Airlines instead of a full merger, approval was granted by the U.S. Department of Justice in December 2024, which allowed the acquisition to be completed.[3] A plan to merge the two airlines' frequent flyer programmes will be submitted to the FTC by June 2025 for review.[3]
Regulatory approval dates
China
On December 26, 2022, the Ministry of Commerce of China announced its approval of Korean Air's merger with Asiana Airlines.[38]
European Union
On March 17, 2023, the European Commission (EC) released the results of an in-depth investigation concluding that the merger would restrict competition with a concentration of market power between Europe and Korea.[39] Specifically, the Commission cited reduced competition on passenger routes between South Korea and France, Germany, Italy, and Spain and reduced competition for air cargo between all of Europe and South Korea.[40] The Commission suspended its investigation into the merger in June 2023 due to the companies' failure to provide proposed corrective remedies before the commission's deadline.[40]
