The Fair Trade Commission rejected a proposed mileage integration plan submitted Thursday by Korean Air regarding its planned merger with Asiana Airlines, citing insufficient consumer safeguards and a lack of clarity.
The antitrust watchdog said it had "immediately requested revisions and supplements" to the plan filed by Korean Air.
“The proposed scheme did not sufficiently ensure the availability of mileage usage options comparable to those previously offered by Asiana Airlines,” the FTC said, noting that the details surrounding the conversion ratio and the plan’s overall transparency fell short of standards required to initiate a formal review.
The FTC emphasized that any unified mileage program must “protect the trust of Asiana Airlines consumers and ensure they do not suffer disadvantages,” adding that the interests of both Korean Air and Asiana customers must be “equally safeguarded.”
It also said that Korean Air’s current plan will not be made public at this time. “It is premature to disclose the integration details to the public,” the antitrust regulator said. “Further revisions and enhancements are needed, after which we plan to consider procedures to gather input from stakeholders and industry experts.”
According to industry sources, the integration plan submitted by Korean Air is likely to adopt a 1:1 ratio between the two companies. The combined value of unused mileage from both airlines amounts to about 3.7 trillion won ($2.7 billion).
yeeun@heraldcorp.com
