How Asiana Airlines & Korean Air Are Looking To Speed Up Their Merger

Asiana Airlines has created a special task force that will work to expedite its merger with Korean Air. The group will focus on acquiring approval from the three remaining foreign antitrust regulators and any other challenges the merger must overcome.

Pushing through Asiana-Korea merger

The expanded ‘Corporate Merger Task Force’ will consist of 42 members, including seven senior Asiana executives. Before this, the team was headed by Asiana’s strategic planning department leader, but will now be led directly by its Vice President and Interim CEO Won Yoo-seok. This comes just weeks after the European Union (EU) extended its deadline on a ruling from July 5th to August 3rd having earlier made clear its intentions to launch a full-scale investigation into the deal.

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The task force will look to speed up the merger process by dedicating resources to overcoming antitrust hurdles. With three antitrust bodies in the US, EU and Japan conducting in-depth investigations into the deal, the higher workload has necessitated a larger team to prevent any further delays.

Asiana Airlines said in a statement,

“With the extension of review by foreign competition authorities, the amount of requested materials are becoming massive. To enhance our capacity to respond to these reviews, we have implemented a task force operating system centered on the acting duties of the CEO, and also bolstered our practical workforce.”

The task force

The Corporate Merger Task Force will be structured into two main groups – the “General Group” will consist of Legal and Strategic Planning experts, while a “Support Group” will be made up of Passenger, Cargo, Finance, and External Cooperation departments.

According to FlightGlobal, it is understood that Asiana’s task force is separate from Korean Air’s own efforts to speed up the process, so both carriers are upping their efforts to get the deal over the finishing line. An official told Korea Joongang Daily that Asiana’s task force will either directly submit to a foreign regulator or corroborate with Korean Air, whose own task force will deal with regulators directly.

Full approval this year?

Progress has been understandably slow since news of the Korean Air-Asiana merger first broke in November 2020, with Korean Air requesting approval from fourteen different competition regulators across the globe. Eleven of those bodies have since given the green light to the merger, most recently the United Kingdom’s Competition and Markets Authority (CMA) earlier this month.

​​​​​​​Along with the UK, the merger has been approved by authorities in Australia, South Korea, Singapore, Vietnam, Thailand, Turkey, Taiwan, Malaysia, China, and the Philippines, with just Japan, the European Union and the US remaining.

Photo: Vincenzo Pace | Simple Flying

While the EU is now in its second phase of review, Japan has only just launched its preliminary consultation stage and the US Department of Justice recently asked for more time to grant its approval. The 1.8 trillion won ($1.2 billion) deal – which will see Korean Air take a 63.9% stake in Asiana – could collapse if it fails to receive approval from just one of the remaining antitrust regulators.

Do you think the three remaining regulators will be happy to green-light this deal? What are your overall thoughts on the merger? Let us know in the comments.

Source: Korea Joongang Daily, FlightGlobal