Korean Air receives approval from China on Asiana acquisition
The Ministry of Commerce of the People’s Republic of China (MOFCOM) announced its approval of Korean Air’s business combination with Asiana Airlines on December 26.
MOFCOM has demanded that the merged Korean Air-Asiana entity reduce its market share due to competition concerns, to which Korean Air has submitted remedies proposing to transfer slots to any new airlines wishing to start air services on nine routes where both Korean Air and Asiana Airlines operate. Five of the nine routes have been proposed by the Korea Fair Trade Commission (KFTC) earlier this year and an additional four routes have been advised by MOFCOM.
Korean Air expects MOFCOM’s approval of the business combination to play a positive role in the review process of the remaining competition authorities.
Currently, Korean Air is still waiting for business combination approvals from the U.S., E.U. and Japan, countries where reporting is mandatory, as well as the final approval from the U.K., where reporting is arbitrary. The U.K.’s Competition and Markets Authority (CMA) has accepted remedies submitted by Korean Air, but will gather opinions from the market before giving their official approval. Korean Air will continue to cooperate closely with the remaining competition authorities to ensure the review process is completed as soon as possible.
The airline submitted business combination reports to the nine countries that require reporting on January 14, 2021. Out of these nine countries, Korean Air has received approval from China, Korea, Turkey, Taiwan and Vietnam. The Thailand Competition Commission announced that submission of a business combination report was not necessary.
From countries where reporting is arbitrary, Korean Air has received clearance from Singapore, Malaysia and Australia. The Philippines has confirmed that the business combination report was not required.