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Tuesday, April 23, 2024

EU conditionally approves Korean Air’s acquisition of Asiana Airlines

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Korean Air and Asiana Airlines planes at Incheon International Airport on Tuesday [YONHAP]
Korean Air and Asiana Airlines planes at Incheon International Airport on Tuesday [YONHAP]

The European Union (EU)’s antitrust regulators have given conditional approval for Korean Air’s acquisition of its smaller rival, Asiana Airlines.

To secure approval from the EU, Korean Air’s board of directors approved the selling off of Asiana Airlines’ cargo business unit and the transfer of four major European passenger routes — Frankfurt, Barcelona, Rome, and Paris — to a domestic low-cost carrier.

Korean Air will implement measures to address monopoly concerns before the EU’s final approval, expected by the end of this year.

The proposed merger, initiated in November 2020 and now in its fourth year, now only awaits approval from the United States among the 14 mandatory reporting countries.

Yet the U.S. Department of Justice is contemplating taking legal action to block Korean Air’s acquisition of Asiana Airlines due to competition concerns, Politico reports. United Airlines, headquartered in Chicago, has also expressed opposition to the merger, reportedly due to concerns that the acquisition would result in the loss of one of its Star Alliance partners.

Resolving conflicts between management and employees, which stem from issues like employment transfers resulting from the sale of the cargo business unit and route redistribution, remains a challenge in the acquisition process.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]