Korean Air could face delays in absorbing Asiana

Korean Air's plan to absorb rival Asiana Airlines could be delayed as key approvals are taking longer than expected. Korean Air initially planned to complete the merger by next year after injecting 1.5t won into Asiana Airlines in late June to acquire a 63.7% stake. "The KFTC's review of the Korean Air-Asiana Airlines merger is being delayed. It is unfortunate," KDB Chairman Lee Dong-gull said at a press conference last week. "Competing countries are waiting for the KFTC's response on the issue to make their decisions." Both Korean Air and Asiana Airlines have been hit hard by a decline in passenger traffic due to the prolonged COVID-19 pandemic and are managing to stay afloat by handling more cargo transport volume. Unionized workers at Asiana are calling for a thorough review of the merger procedures to ensure that they keep their jobs. The merger would make Korean Air rank among the world's top 10 airlines. "Eighty-five percent of the routes operated by Korean Air and Asiana Airlines overlap, so we cannot have full confidence in their promise," the labor union at Asiana said. "The company (Korean Air) needs to negotiate with the union to establish employment guarantee measures." State-run Korea Development Bank says the jobs of Asiana workers will be guaranteed under the investment agreement and a violation will force Korean Air to cough up 500 billion won for breach of contract. Korean Air needs to have its Asiana acquisition plan approved by nine different aviation authorities. In January, Korean Air submitted requests for the approval and so far received the green light from Turkey, Thailand and Taiwan, but awaits approval from the United States, EU, China, Japan, Vietnam and the Korea Fair Trade Commission (KFTC). Story has more.<br/>