Merger of Korean Air and Asiana Airlines

In November 2020 during the COVID-19 pandemic, the South Korean Government officially announced that Korean Air will acquire Asiana Airlines.[1] Korea Development Bank, a state-owned bank, will provide 800 billion won to Hanjin Group to help finance the merger between the airlines.[1] The Ministry of Land, Infrastructure and Transport of the Republic of Korea will integrate subsidiaries Air Busan, Air Seoul and Jin Air to form a combined low-cost carrier which will focus on regional airports in Korea.[2]

After the merger is approved and completed, Asiana Airlines will become a member of SkyTeam.[3]

Background

On November 2020, South Korea's Ministry of Land, Infrastructure and Transport announced Korean Air's proposed acquisition the Asiana Airlines.[4] The merger was approved in a Korean Air board meeting on same date,[5] KAL finalized the post merger integration of merger and acquisition and submitted to Korea Development Bank, state-owned bank, and main creditors of Asiana Airlines.[6]

Detailed plan of merger of Asiana Airlines includes;[7][8]

  • Integrate airlines
  • Detailed directions for employment maintenance and succession of collective agreements
  • Effect of integrated expectation
  • Planning of efficiency for supporting the business sector
  • Planning of response to market concerns
  • Resolving the issues of restrictions on holding companies following fair trading law

Korean Air Chairman/CEO Walter Cho and President Woo Kee-hong also stated that Asiana Club will be folded into Korean Air's SKYPASS at a later date.[10][11]

Approval countries
Type Country Date of Approval Notes
Mandatory China 26 December 2022 Approved by Ministry of Commerce.[12]
European Union Under Review Undergoing in-depth investigation.[13]
Japan Under Review
South Korea 26 December 2022 Approved by Fair Trade Commission in conditional approval.[14]
United Kingdom 1 March 2023 Approved by Competition and Markets Authority.[15][16]
United States Under Review Undergoing detailed investigation by Department of Justice.[17]
Non-Mandatory Australia 1 September 2022 Approved by Australian Competition and Consumer Commission.[18]
Malaysia 9 September 2021 Approved by Malaysian Aviation Commission.[19]
Philippines 1 June 2021 Approved by the Philippine Competition Commission.[20]
Singapore 9 February 2022 Approved by Competition and Consumer Commission of Singapore.[21]
Taiwan 1 June 2021 [22]
Thailand 31 May 2021 Approved by Trade Competition Commission.[23][24]
Türkiye (Turkey) 4 February 2021 Approved by Turkish Competition Authority.[25]
Vietnam 16 November 2022 Approved by Ministry of Industry and Trade.[26]

Approval status

In March 2021, KAL announced the merger with Asiana Airlines will be delayed as foreign authorities have not approved the deal. Due to the delay, Asiana Airlines will be operated as a subsidiary in which the airline's operations, IT, and other systems will be operated by Korean Air until 2024.[27][28]

Effective 9 September 2021, Turkey has approved the antitrust deal. Taiwan, Thailand, Vietnam have also approved the merger.[29][30] On June 30, it was reported that the post-merger plans between two airlines were finalized and approved by the Korea Development Bank.[31][32][33] The Korea Fair Trade Commission approved the merger on 22 February 2022, under condition of the airline must give up some of their airport slots and transportation rights of certain regions.[34][35][36]

On 26 December 2022, the Ministry of Commerce of the People’s Republic of China announced its approval of Korean Air’s merger with Asiana Airlines.[37] After the United Kingdom approved the merger on 1 March 2023,[15][16] only three essential countries and entities – namely the European Union, Japan, and the United States – have not yet given their approval.[38]

In June 2021, the Philippines became the first of the so-called non-essential countries to approve the merger.[20] In September of the same year, the Malaysian authority also approved the antitrust deal, with Malaysia officially joining Turkey on the list of countries that approved the said deal between the two airlines.[39][40] Vietnam became the final non-essential country to approve the merger on 16 November 2022.[26]

References
  1. "대한항공·아시아나 통합 국적항공사 출범…산은 8천억 투입" (in Korean). Yonhap News Agency. 16 November 2020. Archived from the original on February 14, 2021. Retrieved November 16, 2020.
  2. "진에어·에어서울·에어부산 통합... 정부 "지방공항 기반해 운영"" (in Korean). Chosun Biz. 16 November 2020. Archived from the original on February 14, 2021. Retrieved November 16, 2020.
  3. "Korean Air delays merger of Asiana to 2024". Korea Times. 30 March 2021.
  4. "국토부 "대한항공의 아시아나 인수, 경쟁력 강화 위해 불가피"(종합)" [Ministry of Land, Infrastructure and Transport "Korean Air's acquisition of Asiana is inevitable to strengthen its competitiveness"]. Yonhap News Agency. Retrieved 16 November 2020.
  5. "Hanjin Group to acquire Asiana Airlines". Korean Air (Press release). Retrieved 16 November 2020.
  6. "Korean Air and Korea Development Bank finalize Asiana post merger integration plan". Korean Air (Press release). Retrieved 30 June 2021.
  7. "대한항공, 아시아나 '인수 후 통합' 계획 확정···"고용 유지"" [Korean Air Confirms Asiana 'Consolidation After Acquisition' Plan ···"Maintaining Employment"]. Seoul Finanace. Retrieved 30 June 2020.
  8. "대한항공, 아시아나 인수·통합 계획안 최종 확정" [Korean Air finalizes Asiana acquisition and consolidation plan]. Financial News. Retrieved 30 June 2020.
  9. "Asiana Airlines brand to disappear after Korean Air take-over - Executive Traveller". www.executivetraveller.com. 2021-03-31. Retrieved 2023-04-10.
  10. "Asiana's exit from Star Alliance to bolster Korean Air, Delta JV - Executive Traveller". www.executivetraveller.com. 2021-08-20. Retrieved 2023-04-10.
  11. "Asiana Airlines brand to disappear after Korean Air take-over - Executive Traveller". www.executivetraveller.com. 2021-03-31. Retrieved 2023-04-10.
  12. "Korean Air receives approval from China on Asiana acquisition". Korean Air (Press release). Retrieved 26 December 2022.
  13. "Mergers: Commission opens in-depth investigation into proposed acquisition of Asiana by Korean Air". European Commission (Press release). Retrieved 17 February 2023.
  14. "공정위, 대한항공·아시아나 합병 '조건부 승인'" [Fair Trade Commission 'conditional approval' for merger of Korean Air and Asiana]. KBS. Retrieved 22 February 2022.
  15. "영국, 대한항공-아시아나 합병 승인…3개 당국 심사만 남아" [UK Approves Korean Air-Asiana Merger...Only three authorities are left to review.]. KBS (in Korean). Retrieved 1 March 2023.
  16. "Korean Air gets approval from U.K. on Asiana merger". Korean Air (Press release). Retrieved 1 March 2023.
  17. "공정위, 대한항공·아시아나 합병 '조건부 승인'" [U.S. "Additional Examination of Monopoly"...Korean Air-Asiana Merger 'Turbulence'?]. KBS. Retrieved 16 November 2022.
  18. "Korean Air receives green light from Australia on business combination with Asiana". Korean Air (Press release). Retrieved 1 September 2022.
  19. "대한항공, 아시아나항공 인수 말레이시아 정부 기업결합승인 받아" [Korean Air gets approval for Malaysian Business Combination to acquire Asiana Airlines]. Herald Economy (in Korean). Retrieved 9 September 2021.
  20. Sim, Woo-il (2 June 2021). "대한항공, 최근 태국 및 필리핀 경쟁당국 기업결합심의 절차 종결 (Korean Air recently completed business combination deliberation by Thai and Philippine competition authorities)" (in Korean). CBC News.
  21. "Singapore approves Korean Air's business combination with Asiana Airlines". Korean Air (Press release). Retrieved 9 February 2022.
  22. "대한항공, 아시아나 합병 '순항'···대만도 기업결합심사 승인" [Korean Air approves Asiana merger 'Cruising'··Taiwan's Business Combination Review]. Seoul Finanace News (in Korean). Retrieved 1 June 2021.
  23. "Korean Air's Business Combination Approvals for Asiana Acquisition in Progress as Scheduled". Korean Air (Press release). Retrieved 31 May 2021.
  24. "대한항공, 태국서 아시아나항공 합병 승인받아" [Korean Air approves merger of Asiana Airlines in Thailand]. Yonhap Infomax (in Korean). Retrieved 31 May 2021.
  25. "Vietnam approves Korean Air's business combination with Asiana". Korean Air (Press release). Retrieved 10 February 2021.
  26. "Vietnam approves Korean Air's business combination with Asiana". Korean Air (Press release). Retrieved 16 November 2021.
  27. "대한항공 "아시아나 인수 2년 후 완전통합"" (in Korean). Chosun Ilbo. 31 March 2021.
  28. "아시아나, 대한항공 자회사 편입후 2년간 독립 운영" (in Korean). Munhwa Ilbo. 31 March 2021.
  29. "대한항공-아시아나 기업결합심사, 태국서 승인…터키 이후 3개월만" (in Korean). EBN. 31 May 2021.
  30. "베트남, 대한항공-아시아나 기업결합 승인" (in Korean). Financial News. 16 November 2021.
  31. Asia, T. T. G. "Korean Air-Asiana merger cleared for take-off | TTG Asia". www.ttgasia.com. Retrieved 2021-07-07.
  32. Chua2021-06-30T08:50:00+01:00, Alfred. "Korean Air on track for Asiana acquisition". Flight Global. Retrieved 2021-07-07.
  33. "Korean Air's Merger Plan With Asiana Airlines Has Been Finalized". Simple Flying. 2021-06-30. Retrieved 2021-07-07.
  34. Chua2022-02-22T05:06:00+00:00, Alfred. "South Korea competition watchdog conditionally approves Korean Air-Asiana merger". Flight Global. Retrieved 2022-02-23.
  35. "S Korea gives conditional nod to Korean Air's Asiana Airlines purchase". CNA. Retrieved 2022-02-23.
  36. Yoo, Hong (2022-02-22). "FTC grants conditional approval for Korean Air-Asiana merger over monopoly concern". The Korea Herald. Retrieved 2022-02-23.
  37. Varley, Len (2022-12-27). "China approves Korean Air acquisition of Asiana Airlines". AviationSource News. Retrieved 2022-12-27.
  38. "Korean Air delays merger of Asiana to 2024". koreatimes. 2021-03-29. Retrieved 2021-04-15.
  39. "Mavcom approves Korean Air-Asiana Airlines merger in Malaysia's first competition-related merger case". The Edge Markets. 2021-09-09. Retrieved 2021-09-16.
  40. Sunbiz. "Mavcom greenlights Korean Air-Asiana merger". www.thesundaily.my. Retrieved 2021-09-16.
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