Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
EXCLUSIVE Singapore grants approval for Korean Air-Asiana Airlines merger
Boeing 787-9 aircraft operated by Korean Air / Korea Times file
By Yi Whan-woo
By Yi Whan-woo
Singapore's antitrust regulator recently approved Korean Air's acquisition of its domestic rival, Asiana Airlines, because regulatory authorities there do not think the merger will raise any serious issues, a top industry executive told The Korea Times, Monday.
While Singapore's approval is not crucial to the entire approval process, the green light is expected to be a plus for the acquisition, which has been postponed for two years, according to the industry sources.
“Singapore contacted U.S.-based travel agencies in Korea and asked them whether or not the Korean Air-Asiana Airlines merger would hurt fair competition. The travel agencies contacted by the regulatory authorities in Singapore responded positively, and the views have been endorsed by the Singaporean antitrust authorities,” according to the executive.
Singapore was one of the five countries ― including Britain, Australia, Malaysia and the Philippines ― that Korean Air voluntarily turned to for consideration.
So far, Malaysia and Singapore have approved the plan, and industry sources say the decisions will positively influence the antitrust reviews currently under way in more than half of the nine countries where it is being considered.
The nine regions and countries in which Korean Air's and Asiana Airline's major international destinations are located are: Korea, the United States, the European Union, China, Japan, Vietnam, Turkey, Taiwan and Thailand. The merger plan is subject to receiving approval from each of the nine countries' antitrust authorities.
Due to possible monopoly risks, however, only four of them ― Taiwan, Thailand, Turkey and Vietnam ― have so far endorsed the deal, which will result in the creation of one of the world's 10 largest airlines.
“Under such circumstances, it is noteworthy that Singapore approved the plan,” an official in the aviation industry said on condition of anonymity.
In Korea, the Korea Fair Trade Commission (KFTC) has been stepping up its efforts to finalize the merger, by taking into account the progress being made by the countries involved, after being criticized for being overly cautious in its decision-making steps.
KFTC Chairperson Joh Sung-wook in October vowed to complete the review of the Korean Air-Asiana Airlines takeover. She noted that the KFTC had signed a memorandum of understanding (MOU) with the Ministry of Land, Infrastructure and Transport for cooperation aimed at preventing a possible monopoly, while wrapping up the review promptly.
The KFTC declined to provide more details, Monday. But industry sources say that the KFTC may come up with “a conditional approval centering on a maximum number of flights allowed for operating in the destination cities and time slots for operating flights.”