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| Korean Air's Boeing 787-9 aircraft / Courtesy of Korean Air |
By Park Jae-hyuk
Korean Air issued a statement Monday to deny speculations that it is facing setbacks in receiving approvals from overseas antitrust regulators for its acquisition of its domestic rival, Asiana Airlines.
"Korean Air has made every effort to get approval for the merger in other countries," the largest air carrier in Korea said. "Each country's review is underway without any setbacks."
The Korea Fair Trade Commission gave a conditional approval for the deal in February, but the U.S. Department of Justice reportedly decided to apply stricter rules for its review, after United Airlines raised a question about the deal.
The American air carrier is said to have been concerned about possible fallout from Asiana's withdrawal from Star Alliance, given that Korean Air has formed close ties with Delta Air Lines in transpacific flight routes.
In addition, Korean Air had to reapply for approval in China last October, as the Chinese authorities did not draw a conclusion in time for the deadline.
The fact that Asiana made profits for the fourth quarter straight has also raised questions about the necessity of its sale to Korean Air.
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| Korean Air Chairman Cho Won-tae / Courtesy of Korean Air |
In response to the skeptical outlooks, Korean Air disclosed details about its attempts to convince antitrust regulators in the U.S., the European Union, Japan, China, the U.K. and Australia.
"In order to get approvals from each country's authorities as soon as possible, we formed five teams comprised collectively of more than 100 experts," Korean Air said.
It added that it had paid a combined 35 billion won ($27 million) as of March on hiring three global law firms, eight local law firms, three economic research firms and two political advisory firms.
In particular, Korean Air emphasized that it has asked other air carriers to enter the U.S. market, as the country's authority has requested a similar market competition, even after the acquisition.
The company also said it is usual in China to reapply for approval, after the deadline for review is passed.
"When SK hynix acquired Intel's NAND flash memory chip business, it took similar steps," Korean Air said.
Hwang Yong-sik, a professor at Sejong University's College of Business Administration, however, warned that the intensifying protectionism may delay the approvals further from overseas antitrust regulators.
Korean Air acknowledged the tough environment surrounding the global M&A market, but it expressed its confidence of a positive outcome, emphasizing that Korea is too small to have more than one full-service carrier.
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