On May 31, 2021, the biggest South Korean airline, Korean Air, got the overseas approval from Thailand’s fair competition authority for its planned acquisition of Asiana Airlines.
Thailand’s Office of Trade Competition Commission (OTCC) completed its review of the business combination and “stated that the submission of a prerequisite business combination report was not necessary”.
Korean Air still needs approvals from five countries, including South Korea, the United States, the European Union, China, and Japan, to proceed with a $1.6 billion deal to acquire the cash-strapped Asiana Airlines. In February 2020, the airline received a green light from the Turkish Competition Authority.
“The competition commission of the Philippines, where reporting is arbitrary, also approved of the business combination in May 2021,” read the Korean Air statement written on May 31, 2021.
Korean Air aims to fully integrate Asiana Airlines by 2024, as the merger process is set to officially begin in 2022, according to the president of Korean Air, Woo Kee-hong. Following the merger, the low-cost subsidiary would become “a top-level low-cost airline not only in Korea but also in Asia.”
Asiana’s integration into Korean Air would create a carrier that would operate around 60% of international routes out and into the country. This consolidation could help both airlines to have a competitive advantage over other airlines. Additionally, this acquisition is expected to contribute to strengthening the competitiveness of Seoul’s Incheon International Airport (ICN), which aims to become the representative aviation hub in Asia, according to the airline.
However, Korea’s FTC and other fair competition authorities across the globe could challenge the merger, citing such a huge market share on the international market. Thus, it could be expected that Korean Air and Asiana Airlines would have to give up slots or traffic rights in ICN or other international airports.