As Korean Air Lines submitted a third plan to integrate mileage programs to the Korea Fair Trade Commission, attention is also turning to the fate of Asiana Airlines' co-branded mileage credit cards. The credit card industry argues that Korean Air Lines should take over Asiana Airlines' mileage cards so customers can continue earning miles under the same conditions as before, but Korean Air Lines is reportedly reluctant to accept that.
According to the aviation industry on the 23rd, Korean Air Lines the previous day submitted its third mileage integration plan to the Korea Fair Trade Commission. It added items the Korea Fair Trade Commission (FTC) requested to supplement the second mileage integration plan submitted last month. The Korea Fair Trade Commission (FTC), after a case handler's review of the merger plan, is expected to decide as early as March whether to approve the business combination.
The aviation industry expects a decision on whether subscribers to Asiana Airlines' co-branded mileage cards will be able to use them under the same conditions as before the merger at the time of business combination approval. That is because the Korea Fair Trade Commission (FTC) is also deliberating opinions received from the Credit Finance Association regarding Asiana Airlines' co-branded mileage cards.
A co-branded mileage card is a card that allows the holder to earn airline miles when spending a certain amount. For Asiana Airlines' co-branded cards, many offer an accrual rate of 1 mile per 1,000 won spent. Compared with Korean Air Lines' co-branded cards, which often accrue 1 mile per 1,500 won, subscribers earn more miles for the same spending with Asiana's cards.
Issuance of Asiana Airlines' co-branded mileage cards was suspended at the end of April last year following the merger decision between Asiana Airlines and Korean Air Lines. Since card validity periods are typically five years, these cards can be used until April 2030, after the merger.
The issue is how miles will accrue on spending made after next year. In the mileage merger plan Korean Air Lines previously submitted to the Korea Fair Trade Commission (FTC), the conversion rate between Korean Air Lines–Asiana Airlines co-branded mileage was 1 to 0.82. This means miles earned by Asiana Airlines members through their mileage cards would be converted at 0.82 of Korean Air Lines' SKYPASS miles per 1 Asiana mile. The Korea Fair Trade Commission (FTC) ordered supplements to the mileage merger plan, but is said not to have taken issue with the conversion rate.
Card issuers are demanding that even after integration, Asiana mileage cards remain usable without changes until the end of their validity. They want customers to keep earning 1 mile per 1,000 won spent as before. Korean Air Lines is reportedly sticking to a policy of not allowing additional accrual on Asiana mileage cards after the merger.
Card companies are making this demand out of concern over friction with existing Asiana mileage card subscribers.
Once the two airlines integrate, miles will accrue only as SKYPASS miles when using flights or partners. If the rate changes, subscribers who earned miles with Asiana Airlines cards will not be able to fully enjoy the services they previously received.
For example, a round trip on the Gimpo–Jeju route requires 10,000 miles. A customer who spent 10,000,000 won on an existing card and holds 10,000 Asiana Airlines miles could board without paying an additional fare. However, after integration, if accrual is in SKYPASS miles, the miles this customer earns would shrink to 8,200. As a result, they would need to accumulate 1,800 more miles to use the flight for free.
Another reason customer dissatisfaction is likely to grow is that Asiana mileage cards will not allow additional accrual after the merger. Customers who lack enough miles to buy the ticket they want would have to accept the conversion rate and convert to Korean Air Lines miles. A credit card industry official said, "Because the terms change from the original contract, a flood of customer complaints is inevitable, and card companies will have no choice but to bear it entirely."
Korean Air Lines has not yet stated a clear official position. However, according to the aviation industry, Korean Air Lines is said to be adhering to its existing policy of not allowing additional accrual on Asiana mileage cards until there is a separate instruction from the Korea Fair Trade Commission (FTC).
A Korean Air Lines official only said, "The mileage merger plan will be decided according to the Korea Fair Trade Commission (FTC)'s approval," withholding further comment on specifics.