Korean Air Lines Co.’s bid to acquire smaller South Korean rival Asiana Airlines Inc. for 1.8 trillion won ($1.4 billion) faces an in-depth merger review in the European Union after regulators expressed antitrust concerns.
The European Commission warned the deal “could eliminate potential competition in passenger transport services” between the EU region and South Korea and also that other firms “may be unlikely to exert sufficient competitive pressure on the merged entity” in cargo transport.
The EU probe, which was extended until July 5, will ensure the takeover “does not impede competition and will not lead to higher prices, less capacity or lower quality for passengers and cargo air transport services,” Margrethe Vestager, the EU’s antitrust commissioner, added.
In an emailed statement Saturday, Korean Air said it is “confident that our merger will benefit our customers in the market, and will continue to communicate with the EC and submit our remedies to address their concerns.”
The deal was announced in 2020 and was an attempt by Korean Air parent Hanjin Kal Corp. to stabilize South Korea’s aviation industry amid the coronavirus pandemic. The parent at the time said it expected Korean Air to be ranked as one of the world’s top 10 airlines once the deal is completed.
