이 기사는 2022년 02월 24일 08시10분 thebell에 표출된 기사입니다

Korean Air Lines’ planned merger with Asiana Airlines has won the final approval from the country’s antitrust watchdog, with no restrictive measures imposed on cargo operations.

The Korea Fair Trade Commission (KFTC) gave its conditional approval to the merger of the country's two largest airlines on Tuesday, imposing several restrictive measures on the carriers’ passenger business such as the return of slots and traffic rights for some of the overlapping routes and limitations on fare increases.

The antitrust regulator concluded that the planned merger would have a negligible impact on competition in the cargo market.

The air cargo market is fragmented with various players and relatively flexible with slot restrictions because most cargo flights are scheduled at night, KFTC said. In addition, domestic cargo flights have alternatives such as land and sea transportation, which has a much bigger share in the overall cargo market.

“We made the decision based on a comprehensive consideration of various factors such as alternative services, market concentration, slots and a shipper-forwarder relationship,” a KFTC official said.

The KFTC decision represents a revision to the antitrust enforcer’s initial review report released two months ago. The report contained a condition that limits the carriers’ cargo capacity to the Americas and Southeast Asia to levels in 2019 due to potential competition concerns. About 50% of Korean Air’s cargo revenue comes from the Americas.

In response, Korean Air submitted its opinion emphasizing that the air cargo market is characterized by low concentration, low entry barrier and buyer bargaining power.

Especially, the flag carrier pointed out that its cargo volume has surged since the outbreak of the Covid-19 pandemic in 2020. Korean Air’s international cargo capacity and volume increased by 20% and 43% respectively to 12.5 billion tons and 10.6 billion tons in 2021 compared to 2019, according to company data.

KFTC also seems to have accepted part of Korea Air’s opinion on passenger routes. Restrictive measures initially imposed were mostly included in the final decision, but some of the conditions and wording were revised in favor of Korean Air. (Reporting by Su-jin Yoo)