Korean Air-Asiana deal set to win EU antitrust nod, sources say

Trinity Airways Co

12/01/2024 14:08

(Adds detail on conditional UK antitrust clearance in paragraph
10)
    By Foo Yun Chee
       BRUSSELS, Jan 12 (Reuters) - Korean Air  003490.KS  is
expected to win EU antitrust approval to buy Asiana Airlines
 020560.KS  after the companies pledged to sell the latter's
cargo unit and divest routes to four European cities, two people
with direct knowledge of the matter said.
    The Korean deal underscores a wave of consolidation in the
airline sector, with Lufthansa  LHAG.DE  seeking a 41% stake in
Italy's ITA Airways and British Airways and Iberia owner IAG
 ICAG.L  aiming to buy the remaining 80% of Spanish carrier Air
Europa it does not already own.
    Korean Air, South Korea's biggest carrier, in late 2020 said
it planned to spend 1.8 trillion won ($1.37 billion) to become
the top shareholder of indebted Asiana.
    It submitted the remedy offer in November last year, with
the proposed cargo business sale a significant departure from
the usual airline remedies of airport slots and access to
frequent flyer programmes. 
   South Korean budget airline T'way Air  091810.KS  is expected
to acquire Asiana's cargo business after EU competition
officials made it clear that they would prefer an Asian,
preferably a Korean rival, to be the buyer, the people said.
    Passenger routes to be divested are those to Barcelona,
Frankfurt, Paris and Rome, they said.
    The Commission declined to comment. It has beefed up its
approach towards air mergers after previously approved deals led
to price hikes despite remedies to address their concessions.
    Korean Air said that after comprehensive discussions it had
submitted remedies that can address the EC's concerns. 
    "We will continue our efforts to secure the approval from
the EC and the remaining regulatory bodies," it added. 
    The deal also needs approval from the United States and
Japan. The UK competition watchdog cleared the deal last year
after the carriers agreed to help Virgin Atlantic Airways
 VA.UL  develop air passenger and air cargo services on the
London-Seoul route.
        
  
    ($1 = 1,310.4200 won)

 (Reporting by Foo Yun Chee; additional reporting by Heekyong
Yang in Seoul; editing by Jason Neely, Kirsten Donovan)
 ((foo.yunchee@thomsonreuters.com; +32 2 585 2866; Reuters
Messaging: foo.yunchee.thomsonreuters.com@reuters.net))