Joint Statement by Asiana Pilots and General Staff Unions
"Monopoly Outcome Inevitable for Both Passenger and Cargo Services"
As the corporate merger between Korean Air and Asiana Airlines has passed the critical midpoint, the Asiana Airlines labor union has expressed a stance of "resolute opposition" to the merger. They argue that this merger is merely a means for Cho Won-tae, chairman of the Hanjin Group, to defend his management rights, and that it poses potential losses at both the national and public levels.
The Asiana Airlines Pilots Union and General Union released a joint statement with this content on the 25th.
They claimed, "Looking at the merger and acquisition process so far, the 'mega carrier' that Korean Air touted has become a hollow signboard, clearly reduced to a tool solely for Cho Won-tae, chairman of the Hanjin Group, to defend his management rights."
The two unions stated, "Traffic rights are not simply assets of an airline but assets of the nation," and pointed out, "To proceed with the forced merger, Korean Air has decided to return numerous traffic rights, which has led to a situation where annual aviation industry sales worth trillions of won are shifting from national airlines to foreign airlines."
They noted that Korean Air reduced the number of flights on major European routes to meet the European Union (EU)'s conditional merger approval requirements. The unions criticized, "Recently, there was a unilateral cancellation of journeys for those who pre-booked tickets to Rome during the peak season in August," adding, "Flights to Paris, Frankfurt, and Barcelona are also scheduled to be reduced or canceled, but there has been no official announcement yet. The public damage caused by the return of traffic rights has already begun to appear."
They also expressed concerns that the reduction in airlines after the merger would eventually lead to monopoly issues. With Asiana Airlines merging, only one large full-service carrier (FSC) will remain, and the three low-cost carriers (LCCs) included in both companies (Jin Air, Air Busan, Air Seoul) will also merge, resulting in FSC monopoly and LCC oligopoly. The unions stated, "It is proper to supply airline tickets to the public at reasonable prices through fair competition, but this may no longer be possible," and warned, "It is clear that ticket prices of national airlines will sharply rise in the near future after the merger, causing serious harm to the public."
They also criticized the sale of Asiana Airlines' cargo division. They pointed out that Air Incheon, selected as the acquisition negotiation candidate, has only about 170 employees, so it is unlikely to properly manage Asiana's cargo division with over 800 employees, making the business continuity uncertain. They expressed concern that the air cargo business would ultimately result in a monopoly by Korean Air.
The two unions urged the corporate merger regulatory authorities?the Korea Development Bank, the Ministry of Land, Infrastructure and Transport, and the Fair Trade Commission?to "reconsider the merger from the beginning and discover a new acquiring company."
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