The Fair Trade Commission also announced its intention to file a complaint against Asiana Airlines with the prosecution on the 3rd regarding Asiana Airlines' failure to implement corrective measures imposed as a condition for approval of the Korean Air-Asiana Airlines merger.
The decision was made to impose a 12.1 billion won enforcement fine and file charges against the corporation. This is the largest amount since the "compulsory merger fine system" was introduced in 2000.
The enforcement penalty system is a system that imposes monetary sanctions if corrective measures imposed when there are concerns about restricting competition in a merger between businesses are not implemented.
In December last year, the Japan Fair Trade Commission (JFTC) gave final approval to the business combination proposed by Korean Air and Asiana Airlines. However, as a condition of the approval, the two companies will be subject to a 10-year suspension from the date of the combination, which could potentially restrict competition.
In addition to opening slots and transportation rights on six international routes and eight domestic routes to alternative airlines, the following measures will be implemented until the measures are completed: △Limit on increases in average seat fares △Prohibit reductions in seat capacity
△The FTC had requested the maintenance of key service quality, such as seat spacing and free baggage allowance. What Asiana Airlines violated was the "limit on the increase in average seat fares."
The rule stipulates that fares must not be increased by more than the inflation rate compared to the average fare in 2019 before COVID-19. For example, on routes where corrective measures have been imposed, the "average fare for the first quarter of 2025"
However, after the FTC inspected the implementation status for the first quarter of this year, Asiana Airlines found that the average fare on four routes must not exceed the average fare for the first quarter of 2019 plus the inflation rate.
The average fares exceeded the maximum fare increase by a minimum of 1.3% and a maximum of 28.2%. The affected routes and the excess rates are as follows: Incheon - Barcelona (Business Class) 28.2%
△Incheon - Frankfurt (Business Class) 12.5% △Incheon - Rome (Business Class) 8.4%
△Incheon - Rome (Economy Class) 2.9% △Gwangju - Jeju (Economy Class) 1.3%
A JFTC official said, "The measure to limit the increase in average seat fares is intended to prevent excessive fare hikes by taking advantage of the dominance in the airline market that was strengthened after the merger.
"This is a core item among the corrective measures imposed on the Korean Air-Asiana Airlines merger, but Asiana Airlines has not complied with it since the first implementation," he said.
He added, "We hope that this measure will raise the level of vigilance among airlines in the future and lead to stronger measures to prevent recurrence," and added, "The period for Korean Air and Asiana Airlines to implement corrective measures is 2034."
"This will be in effect until the end of the year, and the JFTC will continue to monitor compliance more strictly," he added.
2025/08/03 13:43 KST
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