The Ministry of Commerce of the People’s
Republic of China (MOFCOM) has granted approval for Korean Air’s
business combination with Asiana Airlines.
MOFCOM demanded that the merged Korean Air-Asiana
entity reduce its market share due to competition concerns.
Korean Air has submitted remedies proposing to transfer
slots to any new airlines wishing to start air services on nine
routes where both Korean Air and Asiana Airlines operate.
Five of the nine routes have been proposed by the
Korea Fair Trade Commission (Seoul-Zhangjiajie/Xi’an/Shenzhen,
Busan-Qingdao/Beijing) earlier this year, and an
additional four routes have been advised by MOFCOM
(Seoul-Beijing/Shanghai/Changsha/Tianjin).
Korean Air expects MOFCOM’s approval of the
business combination to play a positive role in the review process
of the remaining competition authorities.
Currently, Korean Air is still waiting for
business combination approvals from the U.S., E.U. and Japan,
countries where reporting is mandatory, as well as the final
approval from the U.K., where reporting is arbitrary.
The U.K.’s
Competition and Markets Authority (CMA) has accepted remedies
submitted by Korean Air, but will gather opinions from the market
before giving its official approval.
The airline submitted business combination reports
to the nine countries that require reporting on 14 January 2021.
Out of the nine countries, Korean Air has received approval from
China, Korea, Turkey, Taiwan and Vietnam. The Thailand Competition
Commission announced that submission of a business combination
report was not necessary.
From countries where reporting is arbitrary,
Korean Air has received clearance from Singapore, Malaysia and
Australia. Philippines has confirmed that the business
combination report was not required.
