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South Korea Antitrust Regulator Pushes Back on Korean Air Bid to Ease Merger Curbs

By  |  September 10, 2026
Korean Air

South Korea’s competition regulator is moving to reject an effort by Korean Air Lines Co. and four affiliated carriers to loosen capacity requirements imposed as part of the airline’s combination with Asiana Airlines Inc., while investigators are also seeking criminal complaints over alleged obstruction of a regulatory probe.

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    Examiners at the Korea Fair Trade Commission recommended denying the airlines’ request to modify the merger remedies after reviewing passenger booking data, according to a report published by BigGo Finance. The carriers had argued that higher fuel costs, currency pressures and softer travel demand linked to conflict in the Middle East justified easing the requirements.

    The recommendation isn’t a final ruling. The full commission will consider the matter after giving the companies an opportunity to submit arguments and evidence, according to BigGo Finance.

    The dispute centers on conditions attached to Korean Air’s acquisition of Asiana. When South Korean regulators approved the transaction in 2024, they required the airlines to maintain seat capacity at no less than 90% of 2019 levels on 40 domestic and international routes where authorities had identified competition concerns, according to the report.

    Korean Air, Asiana and affiliates Jin Air Co., Air Busan Co. and Air Seoul Inc. subsequently sought relief from those requirements for this year. The airlines pointed to rising oil prices and exchange rates as well as what they characterized as weakening passenger demand, BigGo Finance reported.

    KFTC examiners reached a different conclusion after estimating 2026 passenger demand using ticketing records. The analysis didn’t show a sufficiently broad decline in demand to constitute a major and unavoidable change in circumstances warranting revisions to the merger conditions, according to the report.

    The regulator’s staff also recommended rejecting a more targeted request involving the Cheongju-Jeju route. The airlines had sought to reduce the minimum capacity requirement there to 70% of 2019 levels from 90%. Examiners concluded that the companies hadn’t demonstrated that circumstances arising after the remedies were finalized in December 2024 made compliance impracticable, according to BigGo Finance.

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    The regulatory review has also opened a separate legal front for Korean Air.

    Related: South Korea Fines Korean Air and Asiana Over Merger Condition Breaches

    KFTC investigators conducted an on-site inspection at the carrier’s Seoul headquarters from Feb. 2 through Feb. 6 as part of their examination of the Cheongju-Jeju request, BigGo Finance reported. Three Korean Air employees allegedly deleted work-related computer files and emails connected with the investigation during the first three days of the inspection.

    Commission examiners concluded that the alleged conduct amounted to obstruction under South Korea’s competition law and recommended criminal complaints against Korean Air and the three employees, according to the report. The cited law provides for penalties of as much as two years in prison or a fine of as much as 150 million won for certain acts that interfere with an on-site investigation.

    The outcome has financial implications for Korean Air because failure to satisfy the capacity requirements can result in regulatory penalties. If the commission ultimately adopts its examiners’ recommendation, the airline would remain subject to the 90% threshold on all 40 routes covered by the merger remedies this year, BigGo Finance reported.

    The KFTC said respondents will be able to submit written opinions, review evidence and make oral arguments before commissioners reach a final decision, according to the publication. The regulator also said it intends to continue monitoring compliance with the Korean Air-Asiana remedies to guard against harm to passengers.

    Korean Air is working toward the final integration with Asiana at the end of the year, according to BigGo Finance. The regulator’s preliminary position indicates that the merger conditions could remain a significant constraint on capacity decisions as the two airlines move toward completing their combination.

    Source: BigGo Finance