The Korea Times close
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
Business
  • Tech
  • Bio
  • Companies
Finance
  • Companies
  • Economy
  • Markets
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to President
  • Letter to the Editor
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
Entertainment
& Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
Sports
World
  • SCMP
  • Asia
Video
  • Culture
  • People
  • News
Photos
  • Photo News
  • Darkroom
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Business
  • Tech
  • Bio
  • Companies
Sat, May 28, 2022 | 22:43
Airlines
Korean Air delays merger of Asiana to 2024
Posted : 2021-03-29 16:27
Updated : 2021-03-30 09:31
Print Preview
Font Size Up
Font Size Down
Korean Air Boeing 787-9 / Courtesy of Korean Air
Korean Air Boeing 787-9 / Courtesy of Korean Air

By Kim Hyun-bin

Korean Air, the country's leading full-service carrier (FSC),
has delayed its purchase of Asiana Airlines to 2024, a move which will make Korean Air become the world's seventh-largest airline. However, there are several obstacles in the way, including monopolization issues and the future operations of low-cost carriers (LCC) ― Jin Air, Air Busan and Air Seoul ― the two large airlines currently operate.

According to ruling Democratic Party of Korea (DPK) Rep. Park Yong-jin's office, Korean Air submitted a post-merger integration (PMI) plan to Korea Development Bank (KDB), proposing to acquire Asiana by 2022 and fully merge by 2024.

Korean Air initially planned to complete the merger by next year after injecting 1.5 trillion won into Asiana Airlines in late June to acquire a 63.7 percent stake.

Industry insiders say the delay comes as Korean Air struggles to obtain approval from eight antitrust authorities in countries serviced by the carrier.

The documents were submitted in January, but only Turkey has approved the deal so far, while seven other countries, including Korea, the United States, China, Japan, Vietnam, Taiwan and Thailand have not given their approval.

A minimum of four approvals are needed, excluding the host country, for the merger to take place. If Korean Air fails to win approval, it could be banned from operating in countries that disapproved the deal.

Major airlines and carriers are wary of the Korean Air deal, since it will form the world's seventh-largest carrier, which will further increase competition in an already saturated market.

Korea and the U.S. are bound by the "Open Skies Treaty" which lets airlines from both countries choose the frequency of flights, routes and types of aircraft to use. But many U.S. routes are expected to undergo inevitable changes as Asiana Airlines is under the Star Alliance jointly operating the Incheon―San Francisco route with United Airlines (UA) and code sharing on the New York, Los Angeles, Seattle routes.

Korean Air Boeing 787-9 / Courtesy of Korean Air
Asiana Airlines Airbus 380 / Courtesy of Asiana Airlines

If the deal goes through and Asiana will become part of Korean Air and the SkyTeam alliance, which will prevent partnerships with UA on several U.S. routes. There is a high possibility that U.S. antitrust authorities will take UA's situation into consideration.

"Currently most of the routes Korean Air and Asiana operate in the same destination are in close proximity with some departures just 10 minutes apart. Once the merger occurs, the time slots will most likely be changed further apart to better maximize profitability and provide customers with more options," an industry official said.

However, there are countries that have not inked an Open Skies Treaty with Korea, such as Japan, China and European countries. The respective countries will likely request additional measures against the merger to better protect their local airlines. Some industry insiders believe the countries could invalidate Asiana Airlines time slots after it is integrated into Korean Air.

The Ministry of Land, Infrastructure and Transport estimates 32 routes that Korean Air obtains from Asiana through the merger will lead to a combined market share of more than 50 percent.


Emailhyunbin@koreatimes.co.kr Article ListMore articles by this reporter
 
  • [SPECIAL REPORT] Asylum-seekers create Myanmartown from scratch in Bupyeong
  • S. Korean volunteer fighter in Ukraine returns home with knee injuries
  • Koreans ready to flock to Japan as tourism resumes in June
  • Presidential security team misplaces live bullets
  • Sex slavery activist Youn under fire for not sharing details of settlement with victims
  • POSCO Chemical, GM pick Quebec as site for $327 mil. joint cathode plant
  • Trade deficit feared to become long-lasting trend
  • UN Security Council fails to pass N. Korea resolution due to opposition from China, Russia
  • Early voting for local elections kicks off
  • Zelenskyy to invite Yoon to Ukraine Recovery Conference in July
  • Disney+ original 'Kiss Sixth Sense' to offer high-spirited, fantasy rom-com Disney+ original 'Kiss Sixth Sense' to offer high-spirited, fantasy rom-com
  • [INTERVIEW] German professor hopes to boost appreciation for Korean traditional music [INTERVIEW] German professor hopes to boost appreciation for Korean traditional music
  • Korean films make splash at Cannes Film Festival Korean films make splash at Cannes Film Festival
  • From BTS to TWICE's Nayeon, K-pop hotshots prepare June releases From BTS to TWICE's Nayeon, K-pop hotshots prepare June releases
  • 'The Roundup' becomes most-watched Korean film in pandemic era 'The Roundup' becomes most-watched Korean film in pandemic era
DARKROOM
  • 75th Cannes Film Festival

    75th Cannes Film Festival

  • People in North Korea trapped in famine and pandemic

    People in North Korea trapped in famine and pandemic

  • 2022 Pulitzer Prize: Bearing witness to history

    2022 Pulitzer Prize: Bearing witness to history

  • Worsening drought puts millions at risk

    Worsening drought puts millions at risk

  • Our children deserve the best

    Our children deserve the best

The Korea Times
CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Location
  • Media Kit
  • Contact Us
  • Products & Service
  • Subscribe
  • E-paper
  • Mobile Service
  • RSS Service
  • Content Sales
  • Policy
  • Privacy Statement
  • Terms of Service
  • 고충처리인
  • Youth Protection Policy
  • Code of Ethics
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group