In a new twist to the Korean Air Asiana merger, the UK’s Competition and Markets Authority (CMA) has requested an additional two months to make a decision. Previously the regulator had noted that the merger would reduce competition and that it needs more time to consider undertakings offered by the airline.
The regulator was due to make a decision on January 26, 2023. However, the CMA instead said that it was unable to reach to a decision on the acceptance of undertakings and has now extended its time until March 23, 2023.
"It will not be possible to reach a decision on acceptance of the undertakings by 26 January 2023. A reason for this is that the undertakings involve the approval by the CMA of a proposed remedy taker and the terms of entry of that remedy taker. A further reason is that material engagement with third parties, including the proposed remedy taker, has been required. Accordingly, the CMA considers that there are special reasons for the extension,” CMA said in a statement.
The CMA had initially raised concerns over the proposed Korean Air-Asiana merger as these two are the only airlines operating direct flights between Seoul and London. However, the airline argued that there are reasonable grounds for the acceptance of a modified merger plan.
The CMA already accepted Korean Air's remedies in principle back in November but wanted to gather opinions from the market before making a final decision.
Korean Air finalised its proposed merger with fellow South Korean carrier Asiana Airlines almost two years ago, but receiving the necessary approvals from foreign regulators has taken longer than anticipated. Along with the UK, Korean Air is still awaiting approval from EU, US, and Japanese authorities. The airline has already received approval from Ministry of Commerce of the People’s Republic of China (MOFCOM), Korea, Turkey, Taiwan, Vietnam, Singapore, Malaysia, the Philippines, Thailand, and Australia.
However, if the airline fails to gain approval form even one of the remaining authorities the entire merger deal is likely to collapse.