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| Britain's antitrust regulator is likely to approve Korean Air's planned integration with smaller local rival Asiana Airlines early next year after Korean Air offered solutions to a possible monopoly on routes between the two countries, industry sources said. Korea Times file |
Britain's antitrust regulator is likely to approve Korean Air's planned integration with smaller local rival Asiana Airlines early next year after Korean Air offered solutions to a possible monopoly on routes between the two countries, industry sources said Friday.
Last month, Britain's Competition and Markets Authority (CMA) said the buyout of Asiana by Korean Air could lead to higher prices for passengers flying between London and Seoul as well as impact air cargo services.
"Korean Air and Asiana 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.
He said the deal will progress to a more in-depth investigation should Korean Air and Asiana fail to address the regulator's concerns.
The CMA is expected to deliver its final decision on the integration as early as on Jan. 26 or as late as March 23.
The CMA had demanded Korean Air provide seven out of 17 slots required for landing and takeoff at London's Heathrow Airport to British carrier Virgin Atlantic Airways Ltd., a company spokeswoman said over the phone.
Korean Air submitted the updated remedies, including the CMA demands, after discussions with the CMA. The British regulator was satisfied with the revised offer.
Currently, Korean Air and Asiana have 10 and seven slots, respectively, at the Heathrow airport for flights on the Incheon-London route.
In January last year, Korean Air submitted documents to antitrust regulators in 14 countries for the review of its combination with Asiana.
The company has received approval from nine countries ― Australia, South Korea, Singapore, Vietnam, Thailand, Turkey, Taiwan, Malaysia and the Philippines ― so far for the integration while awaiting the go-ahead from five countries ― China, Japan, Britain, the European Union and the United States.
Korean Air, currently the world's 18th-largest airline by fleet, will become Asiana's biggest shareholder with a 63.9 percent stake if the acquisition is completed.
In November 2020, Korean Air signed a deal to acquire the controlling stake in Asiana in a deal valued at 1.8 trillion won (US$1.5 billion) that would create the world's 10th-biggest airline by fleet.
The nation's two full-service carriers account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea's main gateway, below the level that constitutes a monopoly.
Korean Air aims to launch a merged entity with Asiana in 2024 after completing a takeover process by next year, vowing to streamline their routes and reduce maintenance costs. (Yonhap)
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