KB News Desk
Separate mileage programs could bring daily fines, duplicate operating costs, accounting risks
Korean Air may have to run two separate mileage programs even after its merger with Asiana Airlines takes effect Dec. 17, as South Korea’s antitrust regulator withholds approval of the integration plan.
In a securities filing on Tuesday, the national flag carrier stated that absent approval from the Fair Trade Commission before the merger date, it “may need to maintain and operate the existing Korean Air and Asiana Airlines mileage systems separately.” This would avoid making the programs less favorable than they were at the end of 2019.
2019 serves as the baseline the commission set when it conditionally approved the Korean Air-Asiana merger in 2022. Korean Air agreed to guarantee that consumer-facing terms, including mileage benefits, would not fall below what existed just before the pandemic disrupted the airline industry.
The commission has twice sent Korean Air’s mileage plan back to the drawing board, first in June 2025 and again in December, citing insufficient protections for mileage points set to expire under the merged system.
Under the current proposal, miles earned through flights would convert 1-to-1, while miles earned through airline partner programs would convert at a ratio of 0.82 Asiana miles to 1 Korean Air mile. Asiana members would keep access to their existing miles for ten years.
Korean Air warned that a prolonged split could bring regulatory fines and blunt the merger’s intended synergies.
If regulators find that running two systems left customers worse off than they were under 2019 terms, Korean Air could face fines of up to roughly 925 million won ($620,000) per day. Running parallel systems would also mean duplicate information systems and staffing costs, and delay synergies the airline is counting on from the merger.
“Should the integration plan’s terms, including the mileage conversion ratio, change during the commission’s review, that could affect our accounting treatment and financial condition, including how we measure deferred mileage revenue,” Korean Air noted in the filing.
Korean Air’s outstanding mileage liability reached 2.93 trillion won in the first quarter of this year, up 11.9 percent from a year earlier.
Industry observers say the matter ultimately comes down to whether Korean Air can ease concerns about its dominant market position, now that customers can no longer switch to another major carrier. The commission has stressed that any new system must meet public expectations, not just the bottom line.
“Resolving concerns over reduced consumer benefits from market dominance is the biggest key to this integration,” an industry official noted, pointing to Korean Air’s dilemma between mileage redemption and revenue.
