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Korean Air Finalizes Acquisition of Asiana Airlines

Korean Air’s ambition to acquire the debt-laden Asiana Airlines was first announced in November 2020. Asiana Airlines, severely impacted by the COVID-19 pandemic, was unable to recover from its financial crisis. Following approval by the European Commission in November, Asiana Airlines is now a subsidiary of Korean Air. The total acquisition value stands at KRW 1.5 trillion.

According to a Reuters analysis, the new Korean Air group could account for over half of South Korea’s passenger capacity and rank 12th in international capacity. The group plans to complete the merger within two years. One key initiative includes integrating low-cost carriers (Air Jeju and Air Seoul from Asiana Airlines) under the Jin Air brand. While the acquisition supports the group’s growth, concerns about competition have arisen as South Korea’s two largest airlines merge. This issue contributed to the lengthy approval process, with U.S. regulators expressing apprehension about the group’s potential market dominance.

In response to these concerns, South Korea’s transport ministry has introduced measures to support other local low-cost carriers, including Jeju Air and T’Way. These measures include granting additional rights for medium- and long-haul routes to ensure fair competition. Earlier in May 2024, Korean Air transferred four European passenger routes to T’Way and committed to leasing five A330-200 aircraft to the airline by the end of 2024.

The European Commission and the U.S. Department of Justice eventually approved the merger after these competitive safeguards were implemented. The consolidation is expected to bolster Korean Air’s international standing while maintaining a balanced competitive environment in South Korea’s aviation sector.

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