The European Commission has informed Korean Air of its preliminary view that its proposed acquisition of Asiana may restrict competition in the markets for passenger and cargo air transport services between the European Economic Area (‘EEA') and South Korea.

Korean Air and Asiana are respectively the first and second largest airlines in South Korea. They operate a network of domestic and short-haul routes in Asia as well as long-haul routes between South Korea and the rest of the world.

The Statement of Objections

In February 2023, the Commission opened an in-depth investigation to assess if Korean Air's acquisition of Asiana may restrict competition in the provision of passenger and cargo air transport services between the EEA and South Korea.

The Commission has conducted a wide-ranging investigation to understand the potential impact of the deal. This investigation has included, among others, analysing internal documents provided by the parties and gathering information and views from competing airlines, potential market entrants and customers.

As a result of this in-depth investigation, the Commission is concerned that the transaction may:

• Reduce competition in the provision of passenger transport services on four routes between South Korea and France, Germany, Italy and Spain.
• Reduce competition in the provision of cargo transport services between all of Europe and South Korea.

Korean Air and Asiana compete head-to-head in carrying passengers and cargo between the EEA and South Korea. Together, they would be by far the largest carriers of passengers and cargo on these routes and the merger may remove an important alternative for customers. Other competitors face regulatory and other barriers to expanding their services and may be unlikely to exert sufficient competitive pressure on the merged entity. The merger may therefore lead to increased prices or decreased quality of passenger and air transport services.

Companies and products

Korean Air, headquartered in South Korea, is a full-service carrier with domestic and international operations in passenger and cargo air transport. It operates a hub-and-spoke network with its principal hub at Incheon airport in Seoul. Korean Air is a member of the SkyTeam alliance.

Asiana, headquartered in South Korea, is a full-service carrier with domestic and international operations in passenger and cargo air transport. It has its principal hub at Incheon airport in Seoul. Asiana is a member of the Star Alliance.