China approves merger of top two Korean airlines

SEOUL, Dec. 27 (UPI) -- South Korea's flagship carrier Korean Air said Tuesday it had received the government's approval for integrating the smaller domestic rival Asiana Airlines into its fold.

Regarding China's antitrust regulator's issue with the four air routes between Korea and China being monopolized by a single carrier, Korean Air promised to take the steps necessary to alleviate such concerns.

The Seoul-based company said it was waiting for the greenlight from the United States, the European Union, Japan and Britain, with Britain expected to grant the go-ahead in the near future.

"We expect China's decision to positively affect the decision of policymakers in the U.S., the EU and Japan with regard to the merger," Korean Air said in a statement.

In November 2020, with the pandemic weighing heavily on the airline industry, Korean Air signed a $1.5 billion deal to acquire a controlling stake in Asiana Airlines, then in financial trouble.

Korean Air is trying to complete the takeover process by 2023, which would result in making the merged outfit one of the Top 10 airlines in the world in terms of fleet size.

Thus far, 10 countries besides China have approved the merger: South Korea, Singapore, Vietnam, Thailand, Turkey, Taiwan, Australia, Malaysia and the Philippines.

"Through the Asiana acquisition, I think Korean Air will be able to use to its advantage the increased routes and schedules, enabling it to better compete against global rivals," Eugine Investment analyst Yang Seung-yoon said in a report.

The share price of Korean Air slumped 0.41% Tuesday on the South Korean stock exchange. Asiana Airlines was also down 0.72%.