Korean Air, Asiana to increase award seats ahead of merger

Korean Air Lines Co. and Asiana Airlines Inc. are set to increase award seats while revising their membership terms and conditions to help customers use up travel miles before their expiration as the country’s antitrust body requested such measures ahead of their proposed merger.

The Fair Trade Commission said on Wednesday some provisions in the membership terms and conditions of the country’s two largest carriers including those for travel rewards were unfair as the airline miles would expire even when aviation services were not available due to unavoidable circumstances such as COVID-19.

The competition regulator advised both Korean Air and Asiana to amend the terms and conditions to allow the extension of the rewards’ expiry if it is impossible or significantly difficult for customers to use them.

TO IMPLEMENT AMENDED TERMS AND CONDITIONS FROM JUNE

The FTC also said it was unfair that the terms and conditions cap grace periods to 12 months for expiry extensions in case of impediments to using the frequent flyer miles, adding the periods are not long enough, given tough circumstances for consuming them such as an insufficient amount of award tickets unavailable. 

The regulator recommended the two full-fledged carriers state grace periods of more than 12 months in their membership terms and conditions while increasing award seats and allowing more types of payments with combined cash and travel miles. The FTC, however, allowed the airlines to set expiry grace periods at their discretion.

Korean Air and Asiana plan to implement the terms and conditions on travel rewards, which reflect the FTC’s recommendation, in June.

The competition watchdog judged against some other provisions such as those allowing carriers to change their frequent flyer mile regulations only by tweaking content on their website without additional notices to members. The airlines have already fixed those issues.

The FTC expected other carriers in the country to voluntarily adjust their membership terms and conditions, following the moves of Korean Air and Asiana.

The authority approved Korean Air’s proposed takeover of Asiana, which is expected to create the world’s No. 7 carrier.

The country’s flag carrier has yet to obtain the go-ahead from antitrust regulators in the US, European Union and Japan.

Write to Sul-Gi Lee at surugi@hankyung.com
 
Jongwoo Cheon edited this article.