[2022 National Audit] "Concerns Over Giving Up 69 Weekly US and Europe Flights if Korean Air and Asiana Merge"

"Majority of Abandoned Routes Taken by Foreign Airlines"
"Need for Measures to Protect the Aviation Industry"

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] An analysis has emerged that, following the merger of Korean Air and Asiana Airlines, 69 weekly flights on routes to Europe, the Americas, and Australia will have to be handed over to other airlines. It is expected that most of the routes Korean Air gives up will be taken over by foreign carriers.

According to the office of Park Sang-hyuk, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Democratic Party of Korea, an analysis of the number of flights requiring replacement on long-haul routes after the merger of Korean Air and Asiana Airlines showed that out of 183 weekly flights operated on Europe, Australia, and Americas routes (based on 2019 data), 69 flights will need to be operated by other airlines.

This is because, to pass the corporate merger review by regulatory authorities in each country, the route market share must be lowered to below 50%, which is the general antitrust standard.

Korean Air and Asiana Airlines operate the Incheon?Paris route 12 times a week, holding a 60% market share. To reduce the share below 50%, they must give up 3 weekly flights. Similarly, on routes to Frankfurt (68% share), Rome (75%), London (66%), and Barcelona (100%), they must hand over 4, 3, 4, and 4 weekly flights respectively to replacement airlines.

On the Americas routes, 44 weekly flights must also be operated by replacement airlines.

They must give up 11 weekly flights on the Incheon?New York route (100% share), 2 on Seattle (64%), 14 on LA (Los Angeles, 100%), 7 on San Francisco (69%), and 10 on Honolulu (83%).

For the Incheon?Sydney and Incheon?LA routes, domestic airlines such as T'way Air and Air Premia operate, allowing some domestic airline service to be maintained, but on other routes, foreign airlines are expected to replace domestic carriers.

Vietnam Airlines is expected to operate the Incheon?LA route. For Vietnam Airlines to operate this route, bilateral air service agreements must allocate bilateral traffic rights through government-level air talks.

Bilateral traffic rights refer to the rights of airlines from two countries that have signed an air agreement to operate flights departing from their own country, passing through the other country, and continuing to a third country. Allowing foreign airlines to expand operations even at Incheon Airport, considered a 'home base,' raises concerns that this could undermine the competitiveness of Korea's aviation industry.

Within the aviation industry, there are calls for Korean Air to actively consider domestic airlines rather than foreign carriers as replacement airlines. Since the Fair Trade Commission concluded that traffic rights and slots reclaimed to resolve competition restrictions of the merged airline can be transferred within 10 years from the merger date, T'way Air and Air Premia could become replacement airlines.

Assemblyman Park said, "During the aviation industry restructuring process over the next 10 years, support should be provided so that more domestic airlines can gain opportunities, turning this into a chance to strengthen the competitiveness of the aviation industry," adding, "Through the national audit, we will urge and monitor active responses from policy authorities."