29 September 2021
On 9 September 2021, the Malaysian Aviation Commission (“MAVCOM”) announced that it has approved a merger between Korean Air Lines Co., Ltd. (“Korean Air”) and Asiana Airlines, Inc. (“Asiana Airlines”). Korean Air and Asiana Airlines submitted a voluntary notification and application of an anticipated merger to MAVCOM in March 2021.
MAVCOM noted that the anticipated merger between Korean Air and Asiana Airlines:
- falls within the scope of section 55 of the Malaysian Aviation Commission Act 2015 (“Act”);
- is a failing firm defence merger, with Korean Air entering into a share subscription agreement with Asiana Airlines on 17 November 2020; and
- upon an assessment of the notification and by virtue of section 55 of the Act, is not an infringement of the prohibition under section 54 of the Act.
Section 54 of the Act prohibits mergers that have resulted or may be expected to result in the substantial lessening of competition in any aviation service market. MAVCOM took into consideration that Asiana Airlines has been in a situation of financial distress for some time and cannot be rehabilitated but for the anticipated merger. The voluntary notification of the anticipated merger is the first-ever merger notification in Malaysia.