Courtesy of Korean Air
In late 2020, Korean Air began a step-by-step procedure to take over Asiana which was reeling from snowballing debt and credit crisis caused by the COVID-19 pandemic. The deal triggered concern about the financial structure of Korean Air and its parent group, Hanjin, which have been under pressure to cut down on borrowings through restructuring and the disposal of non-core assets.
However, creditors found a good excuse, saying South Korea's aviation industry should strengthen its fundamental competitiveness in preparation for a post-pandemic era. In 2021, the South Korean flag carrier reported the planned merger to antitrust regulators in 14 countries including South Korea, and is currently on standby for approval from the United States, Japan, and the EU.
In May 2023, the European Commission (EC) under the EU expressed concerns through the preliminary review which stated that Korean Air's proposed merger with Asiana could restrict competition in the airline industry and affect passengers and cargo transport between South Korea and the EU.
Korean Air said that the company requested the EC to provide more time so that the air carrier could prepare remedies that can resolve the EC's concerns over the restriction of competition in the market. The EU's executive arm accepted Korean Air's offer and extend the deadline for extra 20 business days.
"We will do our best to win the final approval from the EC by meeting an amicable settlement within the extended deadline period," a Korean Air official said in a statement on June 29.
reporter
Park Sae-jin
swatchsjp@ajunews.com
