A proposed $1.5 billion merger that would combine Korean Air Lines Co. and South Korean–based Asiana Airlines Inc. has moved forward, after approval by South Korea’s antitrust regulator, but challenges persist.
The Korea Economic Daily reported that the conditional approval by Korea’s Fair Trade Commission (FTC) will pave the way for regulatory approval by the aviation authorities in other countries, but two carriers will be required to drastically adjust their profitable routes.
As a condition of its approval the FTC asked the two carriers to relinquish a portion of their airport slots and traffic rights, mostly on their heaviest routes. These would be reallocated to other Korean airlines — particularly low-cost carriers — in an effort to help these carriers enter the international long-haul flight market.
FTC cautioned that the combination of the two airlines could hamper competition on 26 international and 14 domestic routes among the two c