Trade unions at Asiana Airlines yesterday lodged objections to the merger with Korean Air Lines (KAL).
The opposition comes more than a week after Air Incheon was chosen to acquire Asiana’s cargo arm, a condition of the merger deal..
Asiana’s pilots’ union and a union of office employees claimed KAL’s absorption of Asiana would result in “national and public harm”.
Both unions urged the Korea Development Bank, the Ministry of Land, Infrastructure and Transport and the Fair Trade Commission, which have jurisdiction over the deal, to “review the merger from the ground up and find another buyer.”
The unions also claim the merger would cause a reduction of flights between South Korea and Europe, to the detriment of consumers.
The unions said: “The so-called mega-carrier that KAL promoted has become nothing more than a façade, serving only as a means for chief executive Cho Won-tae (Walter Cho) to defend his management rights.”
Reminiscent of HMM’s employees’ objection to Harim Group’s failed takeover of HMM, Asiana’s union claims Air Incheon is “like a shrimp trying to swallow a whale”.
The South Korean government is pushing for KAL to acquire the heavily indebted Asiana. To satisfy the European Commission’s anti-trust authority, KAL is transferring its Seoul to Frankfurt, Paris, Rome and Barcelona routes to compatriot low-cost carrier T’way Air.
The union response to that is: “KAL has decided to give back a large number of transportation rights to proceed with the unreasonable merger, resulting in the transfer of trillions of won [$billions] in annual revenue from national carriers to foreign airlines.”
So far, 13 countries have given a green light for KAL’s takeover of Asiana, with only approval from the US pending. KAL hopes to finalise the divestment of Asiana’s cargo arm by October.