BRUSSELS — EU antitrust regulators warned on Friday a bid by South Korea’s biggest carrier, Korean Air Lines, for second-place Asiana Airlines could hurt competition, as they opened a full-scale investigation of the deal.
Korean Air would become the top shareholder of indebted Asiana under the proposed acquisition, announced in late 2020, marking one of the first major deals in the aviation industry since the COVID-19 pandemic.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
The European Commission said the deal could affect passenger and air cargo transport services between Europe and South Korea as the two airlines are strong and close competitors, confirming a Reuters story last week.
Advertisement 2
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
“The transaction could reduce competition in the provision of passenger transport services on four routes between South Korea and the EEA (European Economic Area),” the European Union competition enforcer said in a statement.
Sources have told Reuters the four routes are to Barcelona, Frankfurt, Paris and Rome.
“Korean Air is confident that our merger will benefit our customers in the market, and will continue to communicate with the European Commission and submit our remedies to address their concerns,” the airline said in a statement on Saturday.
The EU watchdog will decide by July 5 whether to clear or block the deal. The deadline can be extended depending on whether the companies offer remedies to address the EU concerns. (Reporting by Foo Yun Chee; Additional reporting by Hyunsu Yim; Editing by Mark Potter and William Mallard)