"If we pass the final hurdle of the U.S. Department of Justice (DOJ) merger review at the end of October, we will be able to offer a wider range of air services to our customers."

Korean Air made this announcement during a luncheon press briefing for Korean media held on the 69th floor of the InterContinental Hotel in downtown LA on the 22nd.

Jung Yoon-seok, Director of the Korean Air Western U.S. Regional Office, stated, "In February, we received approval from the European Commission (EC), the European Union’s competition authority, for the merger. The only remaining step is the DOJ's merger review approval. Given the rigorous processes we underwent to gain approval from the EC, including divesting the cargo business and returning slots, we anticipate smooth approval from the U.S. competition authorities as well."

Earlier, on February 13th, Korean Air received merger approval from the EC for its acquisition of Asiana Airlines. This means that Korean Air has secured approval in 13 out of the 14 countries required, including China, the UK, Japan, and Vietnam, with only the DOJ’s approval pending.

The EC had conditioned its approval of the Korean Air and Asiana Airlines merger on the divestment of Asiana’s cargo business and the transfer of traffic rights and slots on four European routes. In response, Korean Air transferred routes such as Rome, Paris, Barcelona, and Frankfurt to T'way Air, thereby addressing concerns over restricted competition in the passenger sector. Additionally, in August, Korean Air signed a basic agreement with Air Incheon to sell Asiana Airlines' cargo business for 470 billion KRW.

Jung noted that unlike in Europe, U.S. competition authorities have not required the transfer of slots or reduction of operations. He explained, "Until now, Korean Air and Asiana Airlines have operated flights at similar times, but in the future, customers will be able to choose from a wider range of times and routes, greatly expanding their options and improving service."

In June, during an interview with Bloomberg at the International Air Transport Association (IATA) Annual General Meeting in Dubai, Chairman Cho Won-tae also expressed confidence, stating, "We have fulfilled all the requirements set by the U.S. and EU, and we expect to receive U.S. government approval by the end of October."

The biggest concern for customers is the mileage integration ratio following the merger of Korean Air and Asiana Airlines. Many customers who use Asiana, the acquired company, are closely watching how the mileage integration ratio will be determined.

According to the Financial Supervisory Service's electronic disclosure system (DART), as of the end of June, Korean Air’s deferred mileage revenue amounted to 2.5278 trillion KRW, while Asiana’s deferred mileage revenue stood at 975.8 billion KRW. Combined, the deferred revenue of both companies totals 3.5486 trillion KRW (approximately $2.668 billion USD).

Jung clarified, "The Fair Trade Commission prohibits the acquiring company from accessing the internal information of the acquired company until the acquisition process is complete. Therefore, the integration of mileage and the merging of operating systems will be decided after the acquisition process is fully finalized."

<Hongyong Park>