UK watchdog warns airline merger plans will increase prices

By Lisa James
Home » UK watchdog warns airline merger plans will increase prices

The UK’s competition watchdog is warning a planned merger between two Asian airlines will affect passenger choice and raise prices and has asked the carriers to address its concerns.

Korean Air announced two years ago it planned to buy Asiana Airlines – subject to regulatory checks.

The Competition and Markets Authority is considering the impact of a merger on UK customers, including assessing whether other competitors are available to provide alternative passenger or cargo services if the merger goes ahead.

It warns the merger ‘would risk higher prices and a reduced quality of service for passengers flying between London and Seoul’.

The CMA said: “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.

“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.”

It’s asked the airlines to provide answers to its concerns by 21 November. The CMA will then have until 28 November to accept the answers or refer the deal for an in-depth phase two investigation.

CMA Senior Mergers Director Colin Rafferty said: “Korean Air and Asiana Airlines are the two main players on the London to Seoul route and the deal risks UK customers and businesses paying over the odds or receiving a lower quality of service.

“Should Korea Air and Asiana Airlines fail to address our concerns, this deal will progress to a more in-depth investigation.”

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