Attention is focusing on whether Korean Air, which has gone all-in on a merger with Asiana Airlines, will obtain approval from the European Union (EU) for a business combination.The EU seems to have entered the Django, extending the merger review deadline twice this year alone.
In the industry, it is highly likely that the EU will approve the merger after reviewing Korean Air's proposal as the EU did not reject the merger with a single stroke, but demanded corrective measures through the EU's interim review report and delayed the review deadline twice.It is the opinion that the extension of the merger review period is not a bad situation in the larger context.
According to the industry on the 29th, the European Commission (EC) decided to postpone the announcement of whether to approve the merger, scheduled for August 3, by two months on the 23rd (local time).It is a paving stone to draw conclusions after examining Korean Air’s corrective measures in detail.
In the future, Korean Air is expected to present a detailed answer and corrective action plan to address the market competition restrictions pointed out by the EC through the interim review report (SO), and the EC will make a conclusion after comprehensively reviewing them.
The issues now focus on the shrinking competition 에볼루션게이밍 for passenger transport services and the shrinking competition for freight transport services between Europe and Korea.After the merger of Korean Air and Asiana Airlines, the EC judges that there are insufficient solutions to solve the monopoly problem in passenger and service operations.
In order to solve the contraction of passenger transportation service competition, a method of transferring many of the two airlines' overlapping route tickets and slots (the right to take off and land at specific times) to a foreign airline based in Europe is being discussed.
Previously, Korean Air was known to have proposed a solution to handing over many of the European traffic rights and slots owned by the two companies to the EU.However, there are observations that the EU was not satisfied with Korean Air's first proposal and is demanding additional measures even while delaying the review.
Initially, the industry expected that Korean Air could return 69 slots operated in Europe and the Americas to obtain EU approval.However, considering the current situation, Korean Air is likely to submit a second proposal in the direction of returning more slots.
It is also important to respond to the criticism about declining competition in freight transportation.
According to the Fair Trade Commission, if Korean Air and Asiana Airlines merge, overlapping international cargo routes will overlap in about 20 markets.It is a concern on the part of the EU that the merger could increase freight costs.
In the case of Korean Air, it is planning to persuade the EU through a solution to resolve concerns about the increase in freight transportation costs, as well as to resolve overlapping routes and reduce competition in the future.
The reaction of the airline industry to the decision to postpone the EU review is sharply divided.The general view is that as the EU has postponed the screening twice, Korean Air is highly likely to pass the screening if it makes a bold bet, such as giving up more slots than expected.
In this case, there are concerns that Korean Air's market position on check here long-distance routes could be significantly weakened.It is pointed out that if too many assets are given away to resolve concerns about monopoly, there may be a situation where there is nothing left after the merger.