Korean Air, Asiana fined $8.7 million for violating merger agreement

Korean Air and Asiana Airlines' planes are stationed at Incheon International Airport. [KIM SEONG-RYONG]

 
Asiana Airlines and Korean Air have been fined 12.1 billion won ($8.7 million) for failing to comply with the Korean government's conditions for the two carriers' merger.
 
The Fair Trade Commission (FTC) found that the two airlines, which received conditional approval to merge on Dec. 12, 2024, had violated the requirements of the merger within less than a year after they were given the go-ahead, according to data released on Sunday. Specifically, the FTC said the two airlines' average ticket price had surpassed the cap set during the deal's approval process. The 12.1 billion fine for noncompliance is the largest of its kind since 1991.
 

Related Article

• FTC orders Korean Air to revise mileage swap ratio in Asiana merger

• Is 1:1 a win-win for Korean Air and Asiana? Mileage integration has fliers on edge.

• Asiana Airlines faces backlash for mislabeling Ukrainian cities as Russian territory on in-flight map

• Asiana adds more flights to New York, Hawaii and Bangkok ahead of summer season

 
The price hike cap was set at "the average inflation rate compared to 2019," which the two airlines exceeded this year, the agency said in a statement. "The average price hike cap was imposed so that the company does not use its enhanced position within the aviation market after the merger, and is the essence of the corrective order of the Asiana Airlines-Korean Air merger, and Asiana Airlines has failed to comply with the order in just the first year."
 
Asiana Airlines raised the price of four routes — Incheon-Barcelona business class, Incheon-Frankfurt business class, Gwangju-Jeju economy and both the economy and business cabins on the Incheon-Rome route — by a range of 1.3 percent to 28.2 percent compared to 2019 fares, the FTC said.
 

Asiana Airline aircraft at the Incheon International Airport in November 2024 [YONHAP]

 
Asiana Airlines and Korean Air's merger was approved last year on several conditions: The average price of the two airlines' tickets would not surpass FTC's cap, the number of available seats would not decrease and the quality of services such as baggage allowance and space between seats would not deteriorate through 2034. The FTC had also ordered the two airlines to yield some routes to other airlines. 
 
On June 12, the FTC rejected Korean Air's proposed mileage integration with Asiana Airlines and ordered it to revise and supplement the ratio and usage options. The antitrust watchdog said the plan was not adequate enough to initiate a full review, citing "a lack of clarity on the swap ratio" and "limited mile usage options" compared to those previously offered by Asiana Airlines. 
 
"We hope this decision will help to raise the awareness of business operators and prevent similar events from taking place in the future," the FTC said. 
 
The two airlines are working to submit a new plan.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]