Routes between Barcelona, Frankfurt, Paris, Rome and South Korea have EU regulators concerned about competition. This three-year M&A saga finds itself with one more new chapter.
EU antitrust regulators warned on Friday a bid by South Korea’s biggest carrier, Korean Air Lines, for second-place Asiana Airlines could hurt competition, as they opened a full-scale investigation of the deal.
Korean Air would become the top shareholder of indebted Asiana under the proposed acquisition, announced in late 2020, marking one of the first major deals in the aviation industry since the COVID-19 pandemic.
The European Commission said the deal could affect passenger and air cargo transport services between Europe and South Korea as the two airlines are strong and close competitors, confirming a Reuters story last week.
“The transaction could reduce competition in the provision of passenger transport services on four routes between South Korea and the EEA (European Economic Area),” the European Union competition enforcer said in a statement.
Sources have told Reuters the four routes are to Barcelona, Frankfurt, Paris and Rome.
“Korean Air is confident that our merger will benefit our customers in the market, and will continue to communicate with the European Commission and submit our remedies to address their concerns,” the airline said in a statement on Saturday.
The EU watchdog will decide by July 5 whether to clear or block the deal. The deadline can be extended depending on whether the companies offer remedies to address the EU concerns.
(Reporting by Foo Yun Chee; Additional reporting by Hyunsu Yim; Editing by Mark Potter and William Mallard)
Photo credit: Korean Air's bid for Asiana airlines has caught the attention of European regulators. Clément Alloing / Flickr