In an encouraging news for Korean Air, Japan's Fair Trade Commission has approved and notified that it will not issue a cease and desist order regarding the merger of Korean Air and Asiana Airlines.
Japan's Fair Trade Commission said,
The Fair Trade Commission has determined that Asiana Airlines Co., Ltd. (corporate number 7700150000045) (hereinafter referred to as "Asiana Airlines") by Korean Air Co., Ltd. (corporate number 6700150004988) (hereinafter referred to as "Korean Air"), Today, we notified Korean Air that we will not issue a cease-and-desist order regarding the acquisition of shares (hereinafter referred to as the ``Act'') of ``Party Companies.''
Two years back , Pandemic was battering Aviation and airlines , specifically the smaller ones without the liquidity cushion. In November 2020, Korean Air had decided to acquire financially troubled Asiana Airlines by signing a deal of worth $1.5 billion.
Korean Air was trying to complete the takeover process by 2023, which would have resulted the merged outfit one of the Top 10 airlines in the world in terms of fleet size.
There are 14 countries (regions) where the merger proposal must undergo competition law examinations, and so far examinations have been completed in 12 countries including Japan, and the EU is expected to approve them soon, while the USA might take some more time to declare its verdict.
Japan's Fair Trade Commission investigated 10 routes (Tokyo-Seoul, Osaka-Seoul, Sapporo-Seoul, Nagoya-Seoul, Fukuoka-Seoul, Okinawa-Seoul, Tokyo-Busan, Osaka-Busan, Sapporo-Busan, and Fukuoka-Busan) before coming to a conclusion.
To keep the competitiveness intact , Korean Air will increase its market share by transferring slots on seven routes: Sapporo/Chitose/Nagoya/Chubu/Osaka/Kansai/Fukuoka to Seoul/Incheon and Sapporo/Chitose/Osaka/Kansai/Fukuoka to Busan. Additionally, they will provide support with ground services and other services to complement the competitiveness of the transferee.
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Japan's Fair Trade Commission added further, as a result of its examination of the passenger and cargo fields, the Fair Trade Commission has determined that there is no problem in the merger , assuming that the measures proposed by the companies concerned are taken.
"In examining this case, the Fair Trade Commission concluded that, assuming that the measures proposed by the companies involved are taken, the conduct in this case cannot be said to substantially restrict competition in a certain field of trade."
South Korea's flagship carrier Korean Air said to have received the Chinese government's approval for integrating the domestic rival Asiana Airlines into its fold.
Approval has come with conditions ,China's antitrust regulator has raised an issue with the four air routes between Korea and China being monopolized by a single carrier , to that objection , Korean Air has promised to take the steps necessary to alleviate such concerns.
Prior to Japan approval , the company had received approval from nine countries -- China, Australia, South Korea, Singapore, Vietnam, Thailand, Turkey, Taiwan, Malaysia and the Philippines
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