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Korean Air’s Boeing 787-9 (Korean Air) |
Korean Air said Monday it is going all out to secure regulatory approvals from the remaining competition authorities -- the EU, US and Japan -- for acquiring its cash-strapped rival Asiana Airline.
Korean Air CEO Walter Cho and other top executives have led the negotiation process with the antitrust regulators, the national flag carrier said in a statement. They also met with foreign airline authorities to offer new flying slots in South Korea, but the press release did not give more details.
A source familiar with the matter said Korean Air was likely to have offered airlines of the EU, US and Japan to "take over its prime-time flying slots in exchange of their less preferable slots such as red-eye flights.”
The bold gesture comes as the three countries have expressed concerns that the acquisition deal may reduce competition in air services between Seoul and their regions. It is a measure to level the field between Korean Air and Asiana Airlines, and foreign air service providers even after the merger, the company said.
“We have also laid out reasonable alternatives against some of the competition authorities’ excessive demands on further corrective actions (on reducing the potential impact of the two airlines’ business integration),” said a Korean Air official, declining to elaborate, citing confidentiality in ongoing negotiations.
In addition, Korean Air is operating a task force team consisting of around 100 experts for the countries it needs approvals from. It has injected more than 100 billion won ($75.7 million) in consulting fees since December 2020.
It is working with the country’s transport and foreign ministries, and Korea Development Bank, the key creditor of the debt-ridden Asiana Airlines, as well.
Of the three countries, Japan is expected to be the first nation to give the green light on the merger, sources said. It is scheduled to wrap up preliminary talks with Korean Air by the first half of this year.
The EU will announce whether it will approve the acquisition deal on Aug. 3, after it pushed the deadline to complete the second-phase assessment from July 5.
The US, who extended the assessment period last November, will be making a decision after monitoring Japan and the EU’s stance on the matter, the company said. If Japan and the EU issue approvals, the US is highly likely to give the go-ahead by 2023.
Of the 14 countries the carrier submitted documents for the acquisition, Korean Air received approvals from 11 countries, including Britain, which gave the green light last month.
