Regulator extends Korean Air-Asiana merger approval deadline

Asiana Airlines (OZ, Seoul Incheon) and Korean Air (KE, Seoul Incheon) have already said they will fully unite later than previously planned, in 2024. Now the Korean Fair Trade Commission’s review of of the merger has officially been extended. The airlines must obtain approval from eight antitrust authorities in territories they operate to, besides South Korea itself. Documents were reportedly submitted in January to China, the European Union, Japan, Taiwan, Thailand, Turkey, the United States, and Vietnam. A minimum of four approvals are needed, plus Korea. If the would-be partners fail to win approval, they could be banned from operating in countries that reject the merger. So far, Turkey, Taiwan, and Thailand have approved it. The KFTC has now extended its contract with a domestic research institute for an analysis of the tie-up by four months, until the end of October, over persistent concerns that the combination will result in a rise in airfares, the Kyunghyang Shinmun newspaper and Business Korea magazine reported. Approvals in the US, the EU, China, and Japan are not likely to be completed this month. According to a report by Park Sang-hyuk of South Korea’s Democratic Party, the merged entity would have a market share of between 50% and 100% on 32 of the 143 international routes that the two airlines operate. Korean Air has insisted that there will be no discretionary price rises for consumers, as it is difficult to raise prices arbitrarily due to government restrictions on the upper limits of fares and the openness to non-Korean carriers to operate most of the routes it serves. But concerns remain, as ticket prices are currently on average well below the cap.