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ACCC gives unconditional clearance to Korean Air for proposed merger
Korean Air Lines (Korean Air) has achieved unconditional ACCC clearance of its proposed acquisition of a majority stake in Asiana Airlines (Asiana), valued at approximately $1.6 billion.
Jess Feyder
Firm: Gilbert + Tobin (Korean Air)
Value: N/A
Area: Corporate
Key players: The G+T team was led by head of competition and regulation Elizabeth Avery, with support from special counsel Rebecca Dollisson and lawyers Johnathon Geagea, Jacqueline Reid and Aaron Park.
Deal significance: The ACCC noted that the acquisition would combine the only two current providers of direct air passenger services between Sydney and Seoul; however, the ACCC took into account that Jetstar and Qantas are commencing flights along this route.
Korean Air is the national carrier of South Korea, and Asiana is the country’s second-largest airline; both offer air passenger and air cargo services with domestic and international operations.
Korean Air and Asiana both operate direct air passenger services between Sydney and Seoul and also offer air cargo services between South Korea and Australia.
Upon giving clearance, the ACCC took into account that Jetstar and Qantas are commencing direct air passenger flights on the route between Sydney and Seoul, from late 2022 and are selling tickets.
The ACCC also noted that Korean Air and Asiana are both significant providers of direct air cargo services between Sydney and Seoul, through belly freight on air passenger services.
Jetstar and Qantas will also be supplying such services, through belly freight on their air passenger services.
Taking into account this imminent new entry by Qantas and Jetstar, the ACCC found that a substantial lessening of competition is not likely to result from the proposed acquisition.
Commenting on the transaction, Ms Avery said: “The airline industry has experienced significant disruption in the past few years.
“We are delighted to have worked together with Korean Air to achieve such a fantastic result, enabling Korean Air and Asiana to continue to provide a competitive offering to and from Australia.”
The proposed merger remains subject to regulatory approvals in some remaining jurisdictions.
