Korean Air is said to have failed to reflect the Fair Trade Commission's required "maintain 90% of available seats" measure when it drew up this year's annual flight plan last year. When approving the business combination of Korean Air and Asiana Airlines, the Fair Trade Commission set a condition that on 40 routes with high market share, the number of seats must be maintained at 90% of 2019 levels.
According to the industry on the 11th, Korean Air left the FTC's corrective measure unattended for more than seven months this year, and only after the FTC demanded a compliance check did it move to respond by belatedly increasing flights on some routes. In trying to increase the annual seat supply that must be fulfilled over a year within a short period, side effects are emerging inside and outside the company, including insufficient crew rest and worsening profitability for low-cost carriers (LCCs).
Before announcing approval of the merger in Dec. last year, the FTC conveyed to Korean Air its views on the corrective measure to "maintain 90% of available seats compared with 2019." Korean Air establishes the following year's flight operation plan every Dec. to efficiently manage aircraft-by-aircraft route assignments and deployment schedules.
However, Korean Air did not reflect the 90% maintenance measure in its operation plan, and after the corrective measure compliance oversight committee composed of the FTC and the Ministry of Land, Infrastructure and Transport flagged this as a problem and moved to impose a penalty for noncompliance and conduct on-site inspections, the company began responding belatedly.
A government official said, "Failing to reflect it in the annual plan can only be seen as effectively intending not to carry out the corrective measure."
The area pointed out by the FTC was reportedly the Guam route. After that, Korean Air increased the Incheon–Guam route from 14 to 21 flights per week, and to implement the corrective measure, airlines in the Korean Air group also moved to add flights one after another. JIN AIR recently added one more Incheon–Guam flight and is operating three flights a day. AIR SEOUL and AIR BUSAN also resumed their Guam routes for the first time in three years.
To do so, AIR SEOUL temporarily suspended its Incheon–Bohol route, and AIR BUSAN also decided to stop operating the Busan–Ulaanbaatar route. With each aircraft's operation schedule already set, the rushed expansion of the Guam route is prompting pilots, cabin crew, and maintenance staff to complain of fatigue.
The LCC sector is also voicing discontent. As airlines in the Korean Air group rapidly increased Guam flights and lowered prices, profitability declined. Jeju Air scrapped its Guam route for the first time in 13 years, citing deteriorating profitability.
An LCC industry official said, "Korean Air's condition to maintain 90% of available seats is effectively turning into a move to kill competitors. Korean Air's monopoly structure, with five airlines under its wing, will ultimately lead to reduced competition and hurt consumer welfare."