Korean Air bows to EC merger demands, amends submission

Korean Air has accepted most of the conditions imposed by EC regulators to secure approval for its proposed merger with Asiana Airlines, and it will formally submit an amended application to Brussels on September 27 accepting those conditions, Yonhap News Agency reported. The conditions include selling Asiana's profitable cargo arm, exiting certain routes between South Korea and the European Union, and giving up slots at some EU airports. The routes that Korean Air or Asiana have proposed dropping include Seoul Incheon - Rome Fiumicino; Seoul Incheon - Paris CDG; Seoul Incheon - Frankfurt International; and Seoul Incheon - Barcelona El Prat. Korean Air and Asiana have a combined 60.06% market share (measured by seat capacity) on the Frankfurt route, which they share with Air Premia and Lufthansa. They have a combined 67.01% market share on the Paris route with Air France taking the remainder. On the Barcelona route, the two carriers have a combined 76.2% market share, with Air Premia, another Korean operator, taking the remaining 23.8%. Korean Air and Asiana are the only operators on the Seoul - Rome route. Korean Air has previously demonstrated a willingness to surrender routes and slot pairs to get merger permission. It handed over seven slot pairs on Seoul - London Heathrow earlier this year to Virgin Atlantic to secure approval from the UK's Competition and Markets Authority and gave up 46 slot pairs across multiple airports in mainland China to get the green light from that country's competition regulator. There are also reports the airline has offered to surrender slot pairs at San Francisco, CA and New York JFK to get the support of US antitrust authorities.<br/>