Korean Air’s USD 520,000 US Lobbying Spree Faces Scrutiny Amid Asiana Merger Challenges

Korean Air (KE) has allocated a substantial USD 520,000 for lobbying efforts in the United States since the beginning of 2022, aiming to overcome the Department of Justice’s (DOJ) resistance to its proposed merger with Asiana Airlines. This strategic spending is disclosed in data compiled by Open Secrets, a US non-profit tracking lobbying expenditures, and reported by the South Korean newspaper JoongAng Ilbo.

According to the data, Korean Air invested USD 400,000 in lobbying activities throughout calendar year 2022, with an additional USD 120,000 allocated in the first half of 2023. The airline officially launched its KRW 1.8 trillion won (USD 1.34 billion) merger bid with Asiana in late 2020. Interestingly, Open Secrets records show that Korean Air did not spend on lobbying efforts in the US in 2019 or 2020.

The proposed merger, requiring approval from antitrust authorities in 14 jurisdictions, has faced challenges, with the DOJ expressing skepticism about granting approval. While several jurisdictions, including China and the United Kingdom, have given their consent with certain concessions, the European Union, Japan, and the United States are yet to approve the merger.

In an attempt to address concerns and gain approval, Korean Air has made concessions, offering to vacate specific routes, surrender slots at major airports, and sell Asiana’s profitable cargo arm. However, questions are emerging about the viability of the merger if too many concessions are made, with concerns raised about the impact on national assets and the broader aviation industry.

The European Commission is expected to make a decision on the merger, with potential influence on the DOJ’s decision, no earlier than January 2024. The DOJ, which has recently blocked other airline merger attempts, is not expected to reach a decision before then.

ch-aviation reached out to Korean Air for comments, but no response was received at the time of publication.