Korean Air, Jin Air, and Asiana Airlines are under investigation by regulatory authorities for violating seat supply obligations on the Cheongju-Jeju route as part of their merger approval conditions.
On September 30, the Fair Trade Commission (FTC) announced that it has submitted a report to the committee regarding the alleged violations of seat supply obligations on the Cheongju-Jeju and Jeju-Cheongju routes by the three airlines.
Previously, the FTC approved the merger of Korean Air and Asiana Airlines, imposing corrective measures on 26 international and 8 domestic routes due to concerns about reduced competition. These measures included structural actions such as transferring slots and operating rights to other airlines, restrictions on seat supply reductions, limits on average fare increases, and maintaining service quality.
Slots refer to the time periods allocated to airlines for departing and arriving at airports, while operating rights grant permission to serve specific countries. Once the structural measures are completed, the obligations related to seat supply, fares, and services for those routes will be lifted.
As a result, the airlines are required to maintain their annual seat supply on the affected routes at over 90% of the levels from the same period in 2019, starting from the merger date of December 12, 2024, until the completion of the structural measures.
However, it has been determined that Korean Air, Jin Air, and Asiana Airlines reduced the seat supply on the Cheongju-Jeju routes below the required 90% from December 12, 2024, to the end of last year. The FTC views this as a failure to comply with the corrective measures imposed at the time of the merger approval.
Consequently, the FTC's report includes recommendations for imposing fines and filing legal actions against each of the three airlines under the Fair Trade Act.
Jeon Seong-bok, head of the FTC's Merger Review Division, stated, "When subsidiaries operate in the same industry, their market shares are included in the assessment of market share and competition restrictions, meaning that low-cost carriers (LCCs) are also subject to corrective measures. We are monitoring compliance with the seat supply reduction obligations on an annual basis."
Separately, the FTC is also reviewing requests from five airlines, including Korean Air, Jin Air, Asiana Airlines, Air Busan, and Air Seoul, to ease corrective measures on the Incheon-Guam and Busan-Guam routes. The airlines have cited a decline in tourism demand for Guam due to deteriorating infrastructure and changing travel trends, requesting changes to the corrective measures last December.
Specifically, they are asking for recognition that the structural measures are complete if existing airlines voluntarily return their slots, even without applications from alternative carriers. They are also requesting a reduction in the seat maintenance standard from 90% to 70% compared to 2019 levels.
The FTC has expressed its intention to deny this request as well. Jeon explained, "Changes in circumstances must occur after the final confirmation of the corrective measures to be considered valid reasons for modification. We find it difficult to recognize that new circumstances have arisen since the decision on the corrective measures."
* This article has been translated by AI.
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