The European Commission (EC) has approved the merger of Korean Air (KE, Seoul Incheon) and Asiana Airlines (OZ, Seoul Incheon), subject to both airlines fulfilling certain agreed conditions. Brussels announced its decision on February 13, 2024. Europe is the 13th of 14 jurisdictions to greenlight the merger, with only a decision from US antitrust authorities outstanding.

The EC had previously flagged its concerns about the merger, which involves Korean buying a 63.9% stake in the smaller airline, taking over its operations, and discontinuing the Asiana brand. Last year, the EC said the proposed merger would likely harm competition in the markets for air cargo services between Europe and South Korea and also likely have an adverse competitive impact on passenger air services on routes between Seoul and certain European destinations, specifically Barcelona El Prat, Paris CDG, Frankfurt International, and Rome Fiumicino.

In response, Korean Air offered to divest Asiana's cargo arm, including its freighter aircraft, slots, traffic rights, flight crew, other employees, and customer cargo contracts. The offer adequately addressed the EC's concerns about the dominance of the two Korean carriers in the air cargo market between South Korea and Europe. "Korean Air can only implement the acquisition of Asiana following the Commission's approval of a suitable buyer for the cargo divestment," the EC's statement on the approval reads. "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."

To ameliorate the EC's concerns about the specified passenger routes between South Korea and Europe, Korean Air has agreed to make available to t'way Air (TW, Daegu) assets to enable that carrier to start flight operations on the four routes. The assets include access to aircraft, slots, and traffic rights. "Korean Air has committed not to complete the merger until t'way has started operating on the four overlap routes," the statement said. "These commitments fully address the competition concerns identified by the Commission."

"This merger raised significant competition concerns in both cargo and passenger air transport services," said Margrethe Vestager, the EC's Executive Vice-President in charge of competition policy. "However, Korean Air committed to the divestment of Asiana's global cargo freighter business to a suitable purchaser; and to the divestment of assets to facilitate the entry of rival airline t’way on key passenger routes. These remedies effectively address our concerns."

Acknowledging the EC merger approval, Korean Air says several steps are involved in divesting Asiana's cargo business, starting with appointing an advisory firm to oversee the process, initiating the bidding, selecting the buyer, and securing EC buyer approval. "Once Korean Air completes the acquisition of Asiana Airlines, the actual cargo divestment process will take place," a Korean Air statement notes.

Korean Air also says that t'way Air will "gradually" start operations on the four passenger routes later this year. "Korean Air plans to provide comprehensive support to t’way Air," the statement read.

The airline adds that with EC approval now secured, it will turn its attention to getting the same from US authorities and hopes to finalise the merger as soon as possible.