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Korean Air foresees smooth Delta jv approval despite anti-competition concerns

Rome, Italy - Raised by smaller airlines in the US

Korean Air foresees a smooth process of receiving government approval for its joint-venture with Delta, despite some concerns about the potential for anti-competition raised by smaller airlines in the US. The airline said Wednesday that it officially applied for the Transport Ministry’s approval for the joint-venture Tuesday, with similar documents filed with the Department of Transportation in the US the same day. The jv is an intensified form of cooperation between the two allied airlines, allowing the carriers to share profits and marketing and sales infrastructure in their trans-Pacific routes. The alliance does not require additional approval from the US Department of Justice because the two airlines received anti-competition immunity from the Department of Transportation in 2002. However, in Korea, the Transport Ministry must sign off on additional cooperative measures activated by the joint-venture. Since this is the first jv of its kind in Korea, it is unclear how long the approval process at the Transport Ministry will take. Some smaller airlines in the US, including Hawaiian Airlines and jetBlue, have expressed concerns about the standing immunity for the alliance, saying that the changes in the airline industry over the past 15 years warrants another review. In November 2016 a joint-venture between Qantas and American Airlines was denied based on concerns about harming competition. However, Korean Air said that it does not foresee any issues with the jv, noting recent trends in the airline industry and the fact that trans-Pacific routes have high transfer rates. The US Department of Transportation has generally greenlighted jv in the trans-Pacific area, including those between United and ANA, and American and Japan Airlines.

fra/pec - 1205940

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