South Korea's Watchdog Orders Korean Air to Revise Asiana Mileage Plan, Citing Consumer Concerns
South Korea's Fair Trade Commission has instructed Korean Air to revise its Asiana Airlines mileage integration plan, part of the post-merger process. The order aims to protect consumer interests and ensure fair value.
South Korea’s antitrust regulator has ordered Korean Air to overhaul its mileage integration plan for the recently finalized merger with Asiana Airlines, declaring the current proposal fails to meet public expectations. The Fair Trade Commission (FTC) announced on Monday that the flag carrier has one month to submit a revised plan that offers customers more practical ways to use their miles.
According to the FTC, the order requires Korean Air to present a more detailed strategy, specifically including measures for the use of bonus seats and seat upgrade services. This move complicates a key aspect of the post-merger integration between the nation's two largest carriers, which was formally completed in December 2024.
The Core Issue: Use It or Lose It
At the heart of the FTC's intervention is the concern that a significant portion of Asiana's outstanding mileage could expire without customers having a fair chance to use it. Under the plan approved in September, flight-earned mileage converts at a 1:1 ratio to Korean Air's program. However, mileage earned from partners like credit cards or hotels converts at a less favorable 1:0.82 rate. The regulator appears less concerned with the 1:1 flight conversion rate and more with the overall usability and potential loss of value for consumers.
The commission stressed the need for a plan that actively helps customers spend their accumulated miles, a critical step to protect consumer assets in the transition to a single dominant airline.
"Mileage integration is a matter of nationwide interest, and the plan must meet public expectations. The revised plan should be carefully reviewed to ensure it ultimately satisfies all airline consumers."
- Fair Trade Commission, Press Release on Monday
Merger Timeline
- November 2020: Korean Air signed a deal to acquire a controlling stake in its rival, Asiana Airlines.
- December 2024: The acquisition was finalized following a yearslong and complex review process by multiple international competition authorities.
- Current Status: Asiana Airlines now operates as a subsidiary of Korean Air. The two companies are in the midst of a full integration of their organizations, personnel, and branding, a process expected to take over a year.
Korean Air now faces the challenge of crafting a new proposal that satisfies the regulator while managing the financial implications of integrating two massive loyalty programs. The outcome will be closely watched as a test case for consumer protection in a major airline consolidation.
PRISM Insight
The FTC's move is a clear signal that post-merger regulatory scrutiny isn't limited to routes and market share. As industries consolidate, loyalty programs—often seen as a soft benefit—are increasingly viewed by regulators as a tangible consumer asset that requires protection. This intervention in South Korea reflects a global trend where watchdogs are digging into the fine print of M&A deals to prevent a subtle erosion of consumer value. For companies undergoing mergers, it's a reminder that a smooth integration of customer-facing systems and benefits is as critical as the backend corporate fusion.
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