Korean Air postponed to January the guidance on mileage integration that it had initially scheduled for this month. Korean Air submitted a plan for integrating mileage following its merger with Asiana Airlines to the Fair Trade Commission in Sept. and is awaiting final approval.
According to the aviation industry on the 28th, Korean Air delayed the opening of the mileage integration guidance site, which had been scheduled for November, to January. The plan was to announce the finalized mileage integration plan through the site and guide customers on conversion and usage methods, but it was postponed as approval from the Fair Trade Commission has not been granted.
The Fair Trade Commission received a revised mileage integration plan from Korean Air on Sept. 25 and is proceeding with procedures for deliberation at a full commission meeting. To that end, it conducted a two-week public comment period for air travel consumers and stakeholders starting on the 30th of the same month.
It is understood that the commission is currently hearing explanations from Korean Air, the party under review, on opinions collected through the public comment process. For example, it is hearing Korean Air's position on views from the Credit Finance Association requesting that the accrual rate of existing Asiana Airlines mileage cards be maintained as is.
The Credit Finance Association's view is that Korean Air mileage cards generally accrue 1 mile per 1,500 won in spending, while Asiana Airlines mileage cards accrue 1 mile per 1,000 won, and that if a card remains valid after integration, those rates should be kept.
Under Korean Air's mileage integration plan, the conversion rate for flight mileage is 1 to 1, but the conversion rate for co-branded mileage such as credit cards is 1 to 0.82. As Asiana Airlines' corporate entity is set to be dissolved after the merger date, partner mileage will accrue only as Korean Air mileage, making it highly likely that accrual proportions will change.
However, if card companies change accrual proportions, they face the burden of altering contract terms with customers. Accrual proportions for airline mileage co-branded cards are set by card companies through negotiations with airlines, and since this accrual-rate issue arose from Korean Air's merger, the request is to share the burden.
However, Korean Air's position is that airline mileage co-branded cards are a marketing tool for card companies, so the accrual proportion is an issue the card companies should bear. Moreover, under the mileage integration plan it enabled mileage exchange and introduced a mixed-payment method, improving the usability of Asiana Airlines mileage, and it expects no major difficulties for customers in using their mileage.
It expects that even if the accrual rate of Asiana Airlines cards is not maintained, there will be no major difficulties for customers in using their mileage.
The Fair Trade Commission is hearing Korean Air's position on various opinions, including those from the Credit Finance Association, and, as the process is in its final stage, it expects a decision on final approval as early as within the year. A commission official said, "There is no particular issue, and the schedule for the full commission meeting will be set soon."
A Korean Air official said, "There is no request for revisions or supplements regarding the mileage integration plan," and added, "We are waiting for the Fair Trade Commission's final approval."