In December 2024, we noticed Korean Air’s takeover of Asiana finalized, after a course of that took over 4 years. The 2 airways are persevering with to function as impartial manufacturers, and that can probably stay the case till at the very least late 2026.
There’s now an fascinating replace, as it seems that Korean Air is attempting to screw over the members of Asiana’s loyalty program, and fortuitously regulators are stepping in to dam this.
Regulators reject Korean Air’s loyalty program plans
Whereas Korean Air and Asiana are owned by the identical mum or dad firm, in the meanwhile the airways proceed to keep up separate branding, in addition to separate loyalty applications. Korean Air is in SkyTeam and has the Korean Air SkyPass program, whereas Asiana is in Star Alliance and has the Asiana Membership program.
Korean Air has reportedly submitted its proposal to regulators for merging the loyalty applications of the 2 airways. Nonetheless, this proposal has been rejected by South Korea’s Truthful Commerce Fee (FTC), citing inadequate client safeguards, and a scarcity of readability.
Based on the FTC, “the proposed scheme didn’t sufficiently guarantee the provision of mileage utilization choices corresponding to these beforehand supplied by Asiana Airways,” particularly noting particulars surrounding the conversion ratio of miles between the applications. The FTC emphasised that any unified mileage program should “defend the belief of Asiana Airways shoppers and guarantee they don’t undergo disadvantages.”
It’s believed that the worth of excellent miles on the two airways totals round $2.7 billion in worth, in order that’s fairly a big quantity.
Korean Air aiming for lower than 1:1 switch ratio
Whereas particulars about Korean Air’s proposed mileage integration plan aren’t formally being made public, unofficially we do know what’s occurring. Primarily, it seems that relatively than transferring all miles from Asiana Membership to Korean Air SkyPass at a 1:1 ratio, Korean Air as an alternative desires a decrease than 1:1 switch ratio for all Asiana miles not earned via flying.
The reason being because of the fee at which individuals in South Korea have traditionally earned miles with co-branded bank cards. Whereas it varies primarily based on this system, Korean Air has typically supplied one mile per 1,500 KRW (1.11 USD) spent, whereas Asiana has supplied one mile per 1,000 KRW (0.74 USD) spent.
Some have advised that Korean Air is contemplating solely providing 0.7 Korean Air SkyPass miles for each 1.0 Asiana Membership miles, however regulators aren’t okay with this. Particularly in a rustic like South Korea, with robust client protections, something lower than a 1:1 switch ratio appears unreasonable.
Asiana Membership miles are literally fairly beneficial, with a number of nice redemption choices, so there’s no denying that the majority Asiana Membership members could be deprived if their miles had been transfered at lower than a 1:1 ratio, regardless of the higher bank card spending alternatives they’ve had entry to.
Backside line
Korean Air hasn’t acquired approval for its request to combine the Korean Air SkyPass and Asiana Membership loyalty applications. The problem appears to contain the switch ratio of miles. You’d suppose {that a} 1:1 integration could be the plain plan, however Korean Air reportedly doesn’t wish to supply 1:1 transfers for Asiana miles not earned via flying.
I respect Korean regulators standing up for shoppers, so it’ll be fascinating to see how lengthy that is drawn out.
What do you make of this Korean Air mileage integration state of affairs?
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