Korean Air – Asiana acquisition unopposed by ACCC

East Hills, NY, USA - January 1, 2017: Korean Airlines A380 aircraft approaching JFK International Airport in New York City.

The Australian Competition & Consumer Commission (ACCC) announced yesterday that it will not oppose the proposed acquisition of Asiana Airlines by Korean Air Lines.

Korean Air and Asiana are both airlines based in South Korea that provide cargo and passenger routes between Sydney and Seoul.

“The acquisition will combine the only two current providers of direct flights between Sydney and Seoul. Critically, however, Qantas and Jetstar will shortly be commencing services on this route,” ACCC chair Gina Cass-Gottlieb said.

The Qantas Group announced in April that Qantas and Jetstar will begin direct air passenger services between Sydney and Seoul. The airlines began selling tickets on this route with flights beginning in November and December this year.

The Qantas Group will also provide air cargo services by transporting freight on all its Sydney-Seoul passenger flights.

“We consider that the Qantas Group offering flights on the Sydney to Seoul route with both its full service and low-cost carriers means that there is likely to be effective competition whether or not the acquisition proceeds,” Cass-Gottlieb said.

The ACCC’s investigation concluded that Asiana is not a ‘failing firm’ as defined in the ACCC’s merger guidelines, after examining the issue. The ACCC will often oppose an acquisition of this nature if it can lead to the domination or monopolisation of a route.

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