The UK’s Competition and Markets Authority (CMA) is considering whether to accept a revised plan from Korean Air Lines for its proposed acquisition of Asiana Airlines.
According to a CMA statement, released on November 28, 2022, the authority is assessing the new measures Korean Air has proposed in order to address competition concerns. The South Korean flag carrier has adjusted its $1.29 billion plan dedicated to buying out Asiana Airlines.
“The CMA considers that there are reasonable grounds for believing that the undertakings offered by Korean Air Lines Co., Ltd, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002,” the authority said.
The CMA has previously raised concerns regarding Korean Air’s proposal once on November 14, 2022, where the regulator said that the deal between the two South Korean airlines could result in higher prices and a reduced quality of service for passengers flying between London and Seoul.
The CMA also found that since both Korean Air and Asiana Airlines are the two main suppliers of direct cargo services between the UK and South Korea, the merger raises competition concerns in the supply of air cargo services between the countries.
“The deal could therefore result in higher costs for UK businesses transporting products to or from South Korea,” the CMA said in a statement on November 14, 2022.
“Korean Air and Asiana Airlines are the two main players on the London to Seoul route and the deal risks UK customers and businesses paying over the odds or receiving a lower quality of service,” CMA senior mergers director Colin Raftery said.
The CMA plans to announce its decision by January 26, 2023.
When will Korean Air finally merge with Asiana Airlines?
The South Korean government first announced its intentions to merge Korean Air and Asiana in November 2020, with Korean Air set to take over an estimated 31% stake in Asiana. But in March 2021, the merger was delayed because the deal did not receive the necessary approvals from foreign antitrust authorities.
The merger plan needs to be approved by several regulators such as the European Union, the United States, China, Japan, Taiwan, Thailand, and Vietnam.
Once the process is completed, the combined carrier will be focused on serving regional South Korean airports as well as operating regional passenger and cargo Asia-Pacific routes. It is expected that the merger deal will be completed by 2024.
