SEOUL— Korean Air (KE) and Asiana Airlines (OZ) have been fined 12.1 billion won (US$8.7 million) by South Korea’s Fair Trade Commission (FTC) for violating key terms of their government-approved merger.
The penalty, the largest of its kind since 1991, was issued after the FTC found that both airlines exceeded fare increase limits set during the merger’s conditional approval in December 2024. Routes from Incheon (ICN), Gwangju (KWJ), and Jeju (CJU) were among those affected.
Photo: By Hyeonwoo Noh – http://www.airliners.net/photo/Korean-Air/Airbus-A380-861/2515862/L/, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=38818177Korean Air, Asiana Merger Violations
When Korean Air (KE) received approval to acquire Asiana Airlines (OZ), the deal came with strict requirements.
The most critical: neither airline could raise average ticket prices beyond the inflation-adjusted 2019 benchmark. This was intended to prevent fare hikes stemming from reduced competition.
However, within the first year, the two carriers surpassed those limits on several routes. The FTC reported that business class fares on Incheon–Barcelona (ICN–BCN) and Incheon–Frankfurt (ICN–FRA) increased between 1.3% and 28.2% over 2019 levels.
Similar fare hikes were recorded on the Gwangju–Jeju (KWJ–CJU) economy route and both cabins on the Incheon–Rome (ICN–FCO) route.
The FTC noted that these violations directly contradicted the corrective orders imposed during the merger’s approval, particularly the condition that ticket prices remain within the inflation threshold.
Photo: By Hyeonwoo Noh – http://www.airliners.net/photo/Asiana-Airlines/Airbus-A380-841/2505314/L/, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=44772783Additional Conditions and Enforcement Measures
Beyond the price cap, the merger came with other long-term obligations. Korean Air and Asiana were required to:
- Maintain the number of available seats through 2034
- Preserve service quality, including baggage allowances and seat spacing
- Transfer certain routes to competing carriers
These conditions aimed to curb the potential monopolistic impact of the merger and ensure consumer protection.
The FTC also blocked Korean Air’s proposed mileage integration with Asiana in June 2025, citing vague terms and inadequate options for Asiana’s existing loyalty program members. The agency ordered Korean Air to revise its proposal with clear swap ratios and improved benefits before resubmission.
Photo: By byeangel from Tsingtao, China – HL8218 | Korean Air Lines | Boeing 777-3B5(ER) | ICN, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=39501090Regulatory Impact and Airline Response
The FTC emphasized that the fine serves as a warning to other companies under similar conditional agreements.
It aims to reinforce the importance of compliance in post-merger operations, especially when market dominance is involved.
Korean Air and Asiana Airlines are now working on a revised plan to address the pricing and mileage concerns raised by the regulator.
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