Korean Carriers' Program Changes Face Government Opposition

Korean Carriers' Program Changes Face Government Opposition

South Korea’s two main carriers — Asiana and Korean Air — may be forced to rescind planned changes to their frequent flyer programs in the face of mounting consumer and government opposition.

According to The Korea Times, the Korean government is likely to force its two domestic airlines to provide customers with a grace period of two years before changing the “terms of use” for their respective programs.

Fair Trade Commission chairman Kang Chul-kyu said on a local radio talk show in January that Korean Air and Asiana Airlines should offer passengers a grace period of at least two years before changing their award levels.

Korean Air Skypass and Asiana Bonus Club both announced in late 2002 that they would be increasing award levels in order to better manage the costs associated with administering the programs. Korean Air, for example, plans to increase awards to the Americas and to Europe from 55,000 to 70,000 miles.

The chief state regulator said the FTC has repeatedly ordered Korean Air and Asiana to correct their decision to cut mileage benefits. One of the companies agreed to extend the grace period from six to 12 months last August after receiving an FTC advisory in July, but upon determining that even a year was inadequate, the commission reordered the grace period be extended to September, The Times said.

Kang said that because the proposed changes violate the original contract between the airlines and consumers, the current award levels should remain in place long enough to permit use of already-earned miles.

“The grace period should be at least two years, and if the changes in terms of use by the airlines do not conform to the fair trade rules, the FTC will prosecute the two air carriers for violation of the Standard Contract Law,” said the fair trade chief.

The FTC further warned the programs that it will adjust the programs’ rules within a month.

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