Asiana Airlines Buyout May Raise Prices Says UK Regulator

The buyout of Asiana Airlines by Korean Air could lead to higher prices for passengers flying between London and Seoul, as well as impacting air cargo services.

Korean Air and Asiana Airlines are the only carriers operating direct passenger flights between London and Seoul and currently compete closely for customers. The only competition that the merged businesses would face on this route would come from providers of indirect flights, which the CMA’s investigation found are a much weaker option for customers.

Related: Watchdog To Review Korean Air, Asiana Airlines Merger Approval

On this basis, the CMA found that the merger would risk higher prices and a reduced quality of service for passengers flying between London and Seoul. While customer demand has recently been lower on this route as a result of the Covid-19 pandemic, around 150,000 passengers travelled from London to Seoul in 2019 – and this level of demand is expected to return in the next few years.

The CMA also found that the merger raises competition concerns in the supply of air cargo services. The CMA found that Korean Air and Asiana Airlines are the two main suppliers of direct cargo services between the UK and South Korea and, even when taking into account the more significant competition that providers of indirect flights provide for cargo customers, would not face sufficient competition after the merger. 
The deal could therefore result in higher costs for UK businesses transporting products to or from South Korea.