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Korean Air and Asiana Airlines aircraft are parked at Gimpo International Airport in Seoul in this February file photo. Newsis

By Park Jae-hyuk

Korean Air's acquisition of Asiana Airlines now seems to depend heavily on the European Union's decision, as China preemptively gave its approval for the business deal, according to aviation industry experts, Tuesday.

The Ministry of Commerce of the People's Republic of China (MOFCOM) announced on Monday that it approved the deal between the two Korean air carriers. The Chinese antitrust regulator's decision came after Korean Air submitted remedies proposing to transfer slots to any new airline wishing to start air services on nine routes where both Korean Air and Asiana Airlines operate.

As a result, China became the first foreign country to give its approval for the acquisition, among countries where reporting for such deals is mandatory. This was in contrast to most industry insiders' expectations, who felt that Korean Air would face difficulty in winning approval from China.

"We expect MOFCOM's approval of the business combination to play a positive role in the review process of the remaining competition authorities," Korean Air said in a press release.

The company is still waiting for approval from the U.S., the EU and Japan, where reporting is mandatory, as well as final approval from the U.K., where reporting is arbitrary.

Given that the U.K. Competition and Markets Authority (CMA) accepted remedies submitted by Korean Air earlier this month, it is expected to give its approval during the first quarter of next year.

The U.S. is also expected to allow the acquisition in the near future, as the Department of Justice said last month that it needs time to review the matter, instead of disallowing the deal. Japan is unlikely to reject the deal, because various budget carriers' use of most of the country's flight routes has reduced concerns over a possible monopoly.

Korean Air, however, still needs to overcome the strict review of the EU, which has a long track record of opposing large-scale acquisitions.

Last year, the EU Commission turned down a merger between Air Canada and another Canadian airline, Air Transat. It also repeatedly took a negative stance on a merger between Spain's leading airline, IAG, and Air Europa, citing monopoly concerns. In January, the EU rejected Korea Shipbuilding & Offshore Engineering's acquisition of Daewoo Shipbuilding & Marine Engineering.

"China was actually the major concern for Korean Air's merger with Asiana because the country is unpredictable," Sejong University economics professor Hwang Yong-shik said. "The EU is expected to follow China, which gave conditional approval for the deal."

Korean Air has received approval from China, Korea, Turkey, Taiwan and Vietnam. The Thailand Competition Commission announced that the submission of a business combination report was not necessary. From countries where reporting is arbitrary, the air carrier has received clearances from Singapore, Malaysia and Australia. The Philippines has confirmed that the business combination report was not required.