The proposed Korean Air and Asiana Airlines merger is facing prolongations for international approval. The European Union has extended its decision date on the acquisition from July 5 to August 3.
In February, the European Commission initiated a thorough investigation to determine if the proposed transaction could lead to unfavorable competition in the passenger and cargo transport services between South Korea and European Economic Area. In their preliminary review, EC indicated that four direct routes from Incheon to Paris, Frankfurt, Rome, and Barcelona might experience reduced competition due to this agreement.
Related: South Korean Watchdog OKs Korean Air-Asiana Tie-Up With Conditions
The merger of Korea’s two largest airlines was originally announced in November 2020 by the Korean government and Korea Development Bank. The deal would be worth more than $600 million. Korean Air will take an approximately 65 percent stake in Asiana and consolidate the airline.
Korean Air is a member of the SkyTeam alliance. Following the successful completion of the merger, Asiana will become part of SkyTeam and be integrated into Korean Air, making it the world’s seventh-largest airline according to The Korea Times. Asiana is currently a member of the Star Alliance.
The transaction sought approval from fourteen regulatory bodies. Korean Air submitted required business combination reports to nine countries in January 2021. Since then, it has received approval from mandatory bodies like Australia, Korea, Malaysia, Singapore, Turkey, Taiwan, and Vietnam.