The Fair Trade Commission will gather public comments on Korean Air and Asiana Airlines' plan to integrate their mileage programs. The key point is that Asiana miles will be kept separate for 10 years after the merger, but if members want to convert, Korean Air miles will be applied at a 1-to-1 rate for flown miles and 1 to 0.82 for partner miles.
According to the Fair Trade Commission on the 30th, this procedure is part of the corrective measures to implement the conditional approval of the Korean Air-Asiana corporations merger in 2022. In December last year, the commission required the submission of an integration plan within six months from the completion date of the acquisition and approval before the merger. Korean Air submitted the initial integration plan in Jun., but after criticism that improvements were needed for consumer rights, it filed a revised plan on the 25th. From today through Oct. 13, commission examiners opened about a two-week process to gather public comments.
◇ Asiana miles can be used without conversion for 10 years
Even if the two companies merge and the Asiana corporate entity is dissolved, Asiana miles will be managed separately for 10 years from the merger date. Even without a conversion request, consumers can continue to use Asiana miles as is for Korean Air flights.
The redemption standards for award tickets and seat upgrades will follow existing Asiana standards, and the expiration period of miles will be guaranteed as originally held by each member. Award seat and upgrade availability will be provided at levels at least equal to those before the merger.
The commission emphasized that there will be no disadvantages to consumers. It said that even after the merger, Asiana miles can be used as is for 10 years, so members who have accumulated miles over a long period will face no disruption in using seat upgrades or award tickets. It added that benefits could expand, such as a wider selection of routes.
Consumers who want conversion can exchange Asiana miles for Korean Air miles. Flown miles will convert at a 1-to-1 rate, and partner miles will convert at a 1-to-0.82 rate. Partial conversion is not allowed; the entire balance must be converted.
Flown miles will use the same rate, considering that both airlines accrue based on flight distance, and partner miles are set at 0.82 in light of consumer input expense such as credit card spending.
For example, if a person surnamed A holding 60,000 Korean Air miles converts 20,000 Asiana miles (10,000 flown, 10,000 partner), the 10,000 flown miles become 10,000, and the 10,000 partner miles become 8,200, for a total of 78,200 miles. Conversion can be requested at any time for 10 years after the merger, and after 10 years, any remaining Asiana miles will automatically convert at the set rates.
◇ Elite member tiers will be carried over after the merger
Until the merger, Asiana's five member tiers and benefits will remain unchanged. After the merger, each tier will be matched to the corresponding Korean Air tier.
For example, Asiana Platinum and Diamond Plus will carry over to Korean Air Morning Calm Premium or Morning Calm Select, and Diamond and Gold will convert to the Morning Calm tier. Star Alliance Gold benefits will be matched to SkyTeam Elite Plus. Lee Byung-geon, director general of the corporations merger review bureau at the commission, said, "Asiana had a five-tier system and Korean Air had three, so there was a gap. To avoid consumers being disadvantaged, Korean Air created 'Morning Calm Select.'"
Customers who convert miles will have their tiers reassessed by simply adding the miles from both airlines. An upgraded tier will be granted only if the reassessment result is higher than before.
For 10 years from the date the acquisition is completed, Korean Air cannot raise the supply price of miles sold to partner credit card companies by more than the inflation rate compared with 2019. It must also maintain partnerships with multiple card issuers to prevent concentration on a specific issuer.
To enhance consumer convenience, mixed payment will also be introduced at Asiana. It will take effect before the merger, allowing Asiana mileage holders to pay up to 30% of the fare in miles when purchasing economy seats. This is the same method already operated by Korean Air, allowing members to use miles even when no award seats are available.
Anyone can submit comments. The commission will review comments submitted by Oct. 13 and finalize the plan through a reasonable comment-gathering process. The finalized plan will take effect from the merger date, and Korean Air will immediately provide guidance to consumers upon confirmation.
The commission said, "We reflected the principle of preventing disadvantages to Asiana consumers and balancing the protection of both sides' rights and interests," adding, "We will gather a wide range of public comments to craft a reasonable final plan."