|Airplanes of Korean Air and Asiana Airlines are seen at Incheon International Airport / Yonhap|
By Baek Byung-yeul
Korean Air said Thursday it has submitted documents to antitrust regulators in multiple countries, asking them to review the company's planned acquisition of Asiana Airlines.
In November last year, the country's largest full-service carrier announced it would acquire cash-strapped rival Asiana Airlines after raising 1.5 trillion won ($1.36 billion) for the deal by issuing new stock. If Korean Air receives approval from the antitrust agencies, the carrier will emerge as the world's 10th largest airline by fleet size.
The carrier itself didn't specify to which countries it submitted the applications, but Lee Dong-gull, chairman of the Korea Development Bank (KDB), recently revealed documents were submitted to regulators in 16 countries including Korea, China, Turkey, Taiwan, members of the European Union and the United States.
"It is difficult to say how long the review process will take because every regulator will make its own judgment based on their interests and estimated impact," a Korean Air official said. "But we hope the review procedure is done quickly."
Because the combined market share of Korean Air, Asiana Airlines and their budget carriers accounts for over 60 percent of the domestic airline industry, it remains to be seen whether the deal will get the green light from the agencies.
Given the European Commission initially prohibited the merger between two Greek carriers ― Aegean Airlines and Olympic Air ― back in 2011, there is concern that getting approvals from Europe could take longer than expected. The proposed merger between the Greek carriers took about two years to go through.
The approval could also possibly see the merged entity raise airfares.
Korean Air President Woo Kee-hong has said many times that the approval won't hurt the interests of customers in terms of airfares, as he claims the combined market share of Korean Air and Asiana Airlines in terms of passenger slots at Incheon International Airport is 38.5 percent, or 40 percent including cargo aircraft.
Another potential obstacle to winning approval from regulators is a joint venture established between Korean Air and U.S. carrier Delta Air Lines. Since the joint venture was launched in May 2018, the number of passengers transferring on Korean Air flights has greatly increased.
When the joint venture was launched in 2018, the Ministry of Land, Infrastructure and Transport approved the creation on the condition that the companies would not reduce the current level of seats provided on the five routes between Korea and the U.S. and to report annually on customer benefits.