KOREAN Air has completed another regulatory hurdle for its drawn-out acquisition of Asiana Airlines after the european Commission (EC) approved the deal last week, reported London's Air Cargo News.
To gain approval from Brussels, the two airlines agreed to sell Asiana's freighter business after the commission had initially rejected the deal over concerns about its impact on competition.
Korean Air also agreed to provide rival Korean airline T'Way with the slots and traffic rights necessary to launch passenger operations on four routes where the EC was also concerned the merger may reduce competition.
'Korean Air will divest Asiana's global cargo freighter business,' the EC said. 'The divestment includes freighter aircraft, slots, traffic rights, flight crew, and other employees, as well as customer cargo contracts among others.
'Korean Air can only implement the acquisition of Asiana following the Commission's approval of a suitable buyer for the cargo divestment.
'Among other requirements, the buyer must be able and have the incentives to operate the divested business in a viable manner and to compete effectively with the merged company.''The EC said that without selling the cargo business and exiting the four routes, they would have been by far the largest carrier on these routes removing an important alternative for customers.
'Other competitors face regulatory and other barriers to expand their services and would have been unlikely to exert sufficient competitive pressure on the merged company,' the EC said.
'This would likely have led to increased prices or decreased quality for passengers and cargo customers.'
SeaNews Turkey
To gain approval from Brussels, the two airlines agreed to sell Asiana's freighter business after the commission had initially rejected the deal over concerns about its impact on competition.
Korean Air also agreed to provide rival Korean airline T'Way with the slots and traffic rights necessary to launch passenger operations on four routes where the EC was also concerned the merger may reduce competition.
'Korean Air will divest Asiana's global cargo freighter business,' the EC said. 'The divestment includes freighter aircraft, slots, traffic rights, flight crew, and other employees, as well as customer cargo contracts among others.
'Korean Air can only implement the acquisition of Asiana following the Commission's approval of a suitable buyer for the cargo divestment.
'Among other requirements, the buyer must be able and have the incentives to operate the divested business in a viable manner and to compete effectively with the merged company.''The EC said that without selling the cargo business and exiting the four routes, they would have been by far the largest carrier on these routes removing an important alternative for customers.
'Other competitors face regulatory and other barriers to expand their services and would have been unlikely to exert sufficient competitive pressure on the merged company,' the EC said.
'This would likely have led to increased prices or decreased quality for passengers and cargo customers.'
SeaNews Turkey
