Korean Air only needs U.S. approval for integration with Asiana Airlines

Courtesy of Korean Air

The integration of Korean Air and Asiana Airlines has turned the corner. The European Union (EU) competition authorities’ conditions set for approval of the business combination were completed in turn, only approval from the U.S. competition authorities was left until the merger.

Korean Air announced on June 17 that it has selected Air Incheon as the preferred bidder for the sale of Asiana Airlines' cargo business.

Korean Air plans to sign a basic agreement on the sale by next month and then complete the sale of the business by the end of the year with EU approval.

"We selected Air Incheon as the preferred bidder based on its transaction certainty, ability to maintain and develop the long-term competitiveness of the air cargo business, and ability to mobilize funds through a capable consortium," Korean Air said.

Air Incheon is the only airline dedicated to air cargo in Korea, which was established in 2012. It currently operates a fleet of 11 aircraft, including eight of its own cargo planes and three leases, focusing on Asian routes, such as China and Southeast Asia. The deal will give Air Incheon access to Asiana Airlines' long-haul routes to the U.S. and Europe, as well as its fleet of medium- and large-sized freighters, further strengthening its business competitiveness.

The sale of Asiana's cargo business follows the EU's "conditional approval" of the deal in February, citing concerns about a monopoly on cargo routes. Earlier, Korean Air also transferred four European routes (to Rome, Barcelona, Frankfurt, and Paris) to T'way Airlines to dispel EU concerns about "restriction of competition" in the passenger sector.

If Korean Air receives final approval from the EU, the industry believes it will have a positive impact on merger review in the U.S. The airline has received approval from 13 of the 14 required filing countries, excluding the U.S.

"We expect to receive final approval from the U.S. by the end of October," Cho Won-tae, chairperson of Hanjin Group, said in a recent foreign media interview, adding, "We believe we have done everything the U.S. and EU have asked for and no more concessions are needed."

※This article has undergone review by a professional translator after being translated by an AI translation tool.