Fair Trade Commission “When Korean Air and Asiana merge, there are many problems due to high concentration”

Input 2020.11.13 11:29

The Fair Trade Commission Korean Air (003490)“The merger of the two companies is very concentrated, so there are a lot of problems,” said 13 of the Asiana acquisition.

When the two companies, the operators n. 1 and n. 2 in Korea, merge, the share of domestic passengers exceeds 50%. The FTC, which decides whether or not to approve a merger, sees the possibility of limiting competition if the combined company’s market share exceeds 50%.

However, just because the market share is high, it is not concluded that competition is limited. As with the logic of the FTC’s approval of Jeju Air’s acquisition of Eastar Jet in April, it can be approved if it proves that Asiana Airlines cannot relaunch other than a merger.

An FTC official said, “If you believe a company is unable to revitalize itself,
Exceptions might apply, but it is unclear if they can apply to this issue because the requirements are very strict. “

In the aviation industry it competes not only with domestic companies but also with foreign airlines. When the merger of the FTC aviation industry is examined, it is not simply based on market share, but on the share of each route. For this reason it is believed that even if the two companies merge, the monopoly problem can be solved given the competition with foreign carriers.

Some fear that if the two major domestic airlines combine to form a “dinosaur airline”, side effects such as higher ticket prices will occur. The two companies still have higher fares than foreign carriers, which is a competitive landscape, but if the competitive landscape disappears, the price could rise further. Some point out that it is not appropriate for the government and Korea Development Bank to step forward and induce the merger of Korean Air and Asiana into the current regime to escape the chaebol economic structure.

When Korean Air takes over Asiana, it must also be investigated by the competition authorities of the foreign countries where Asiana operates. Hyundai Industrial Development, which previously pursued the acquisition of Asiana, signed a contract to acquire 61.5% of Asiana Airlines’ shares in December last year and reported a business combination in six overseas countries, including including the United States, China, Russia, Kazakhstan and Turkey, where Asiana Airlines operates. done.