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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s Fair Trade Commission (FTC) has imposed a ₩12.1 billion (approx. USD 8.9 million) penalty on Asiana Airlines and referred the company to prosecutors for violating key conditions of its merger with Korean Air by overcharging passengers.
The FTC announced on August 3 that Asiana Airlines collected ₩680 million in excessive fares during the first quarter of this year, in breach of pricing restrictions tied to the merger approval. This marks the largest enforcement fine since the system was introduced, and only the third case of its kind, following penalties against Kolon (₩160 million, 2003) and Hyundai HCN Gyeongbuk Broadcasting (₩1.32 billion, 2017).
When the FTC approved the Korean Air–Asiana merger on December 12, 2023, it imposed strict conditions, including:
No reduction of available seat supply below 90% of pre-merger levels
Maintenance of key service standards (seat pitch, baggage allowance, etc.)
And critically, caps on average fare increases for 26 international and 8 domestic routes until 2034.
The fare cap tied average ticket prices to 2019 levels, adjusted only for inflation, to prevent the two dominant carriers from inflating prices.
However, Asiana Airlines breached the cap in the very first reporting period, charging 1.3% to 28.2% above the allowed levels on four routes, including:
Incheon–Barcelona (Business Class)
Incheon–Frankfurt (Business Class)
Incheon–Rome (Business & Economy Class)
Gwangju–Jeju (Economy Class)
More than 20,000 passengers paid an extra ₩48,500 to ₩450,000 each as a result.
The FTC stated it treated the violation seriously, given that pricing control was one of the core conditions of the merger.
Initially, the FTC had considered an even harsher penalty — including a proposed ₩100.8 billion fine and full prosecutorial action against both the CEO and the company. But the commission ultimately reduced the fine, citing mitigating factors:
Asiana acknowledged the wrongdoing
The airline pledged to refund ₩3.15 billion to affected passengers
And efforts were made after February to lower fares in subsequent quarters.
The case underscores heightened scrutiny on the Korean Air–Asiana merger compliance, and signals that violations of key conditions — especially fare caps — will be met with strong enforcement.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
