(ATTN: UPDATES with Korean Air's response and other details in paras 5-7, 10-14; MOVES UP photo)
SEOUL, May 19 (Yonhap) -- The U.S. government is considering suing to block South Korean national flag carrier Korean Air Co.'s planned acquisition of its smaller domestic rival Asiana Airlines Inc. due to competition reasons, a news report has said.
The two Korean airlines' planned merger may harm competition on passenger and cargo traffic between South Korea and the United States, according to U.S. news website Politico.
If the U.S. Department of Justice (DOJ) sues, it would be the Biden government's third attempt to impede what it believes to be monopolistic practices in the airline sector, after suits against the merger between JetBlue Airways Corp. and Spirit Airlines Inc., and an alliance between JetBlue and American Airlines Group, the report said.
It would also be the first time the U.S. has sought to thwart a merger between foreign airlines.
In response to the Politico report, Korean Air said the DOJ has not made any official decision on its planned merger with Asiana.
"At the last meeting with the DOJ on May 12, Korean Air learned that the authority has yet to take a position nor has a confirmed timeline. Korean Air and the DOJ will continue the dialogue until the final decision is made by the DOJ," Korean Air said in a text message.
Korean Air said it will continue to make every effort to obtain all necessary approvals by emphasizing that the majority of the customers on the affected routes are Korean nationals and that the airline fully complies with a robust and comprehensive set of remedies ordered by the Korea Fair Trade Commission.
In 2021, Korean Air submitted documents to antitrust regulators in 14 countries for the review of its combination with Asiana.
The company has received approval from 11 countries, including Britain, Australia, Singapore, Vietnam, Turkey and China, and is awaiting a decision from Japan, the European Union and the U.S.
In 2020, Korean Air signed a deal to acquire the controlling stake in Asiana in a deal valued at 1.8 trillion won (US$1.5 billion) that would create the world's 10th-biggest airline by fleet.
The nation's two full-service carriers account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea's main gateway, below the level that constitutes a monopoly.
Korean Air aims to launch a merged entity with Asiana in 2024 after completing a takeover process by the end of this year, vowing to streamline their routes and reduce maintenance costs.
In the January-March quarter, Korean Air's net profit fell 35 percent to 355.42 billion won from 543.85 billion won a year earlier due to increased operating costs that include higher jet fuel prices.
Operating profit plunged 47 percent on-year to 414.99 billion won in the first quarter from 788.45 billion won. Sales rose 14 percent to 3.19 trillion won from 2.8 trillion won.
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