Korean Air-Asiana Airlines Merger Faces Setback as US Department of Justice Raises Concerns

The United States (US) Department of Justice (DOJ) is deliberating whether or not to sue over the proposed merger between two South Korean carriers, namely Korean Air and Asiana Airlines.

According to a report by Politico, people familiar with the matter have indicated that the DOJ fears that the merger could harm competition on passenger and cargo flights between the US and South Korea. The news comes on the back of the decision by the European Commission (EC), which argued that the merger between Korean Air and Asiana Airlines would “restrict competition in the markets for passenger and cargo air transport services between the European Economic Area (‘EEA’) and South Korea”.

Specifically, the Commission said that following its wide-ranging investigation, it had concluded that competition would suffer on passenger routes between South Korea and France, Germany, Italy, and Spain, and would be reduced on cargo flights between all of Europe and South Korea.

The EC announced its decision on May 17, 2023, sending a statement of objections to Korean Air, which initiated the acquisition of Asiana Airlines back in November 2020.

Previously, Korean Air’s Chief Executive Officer (CEO) Walter Cho has indicated that the carrier plans to complete the takeover sometime during 2023. The United Kingdom’s Competition Market Authority (CMA), the country’s competition regulator, approved the merger, following Korean Air and Asiana Airlines putting forth remedy measures.

Those measures included giving up slots at London Heathrow Airport (LHR) and Seoul Incheon International Airport (ICN) to Virgin Atlantic to operate routes between London, the UK, and Seoul, South Korea. Virgin Atlantic became a member of the SkyTeam Alliance on March 2, 2023, enabling easier code-sharing agreements between it and other members of the airline alliance, including Korean Air.