The government and the ruling party are pouring fierce attacks every day toward Korean Air’s mileage program reform plan. Accordingly, some predict that Korean Air will come up with additional consumer benefits next week.
On the 17th, Jin-seok Jeong, chairman of the People’s Power Emergency Response Committee, said on the social network service (SNS), “Korean Air’s greed, which virtually monopolized long-distance air routes, not to mention the monopoly and oligopoly of banks and telecommunications companies, exploded public anger.” He continued, “If the market does not correct itself autonomously, the government has no choice but to step in.”
The deduction standard for Korean Air’s new mileage system, which is scheduled to take effect in April, will change from ‘region’ to ‘flight distance’. Korean Air explains that the deduction rate increases for long-distance routes such as the United States and Europe, but users of short-distance routes such as Japan and Southeast Asia do not have to spend relatively less mileage.
Seong Il-jong, chairman of the People’s Power Policy Committee. 2023.2.14/News1 ⓒ News1
Seong Il-jong, chairman of the People’s Power Policy Committee, criticized Korean Air’s claim at the party meeting that day, saying, “Considering that (people are mostly) buying tickets by collecting mileage when tickets are expensive and alternative airlines are using limited long-distance routes, Korean Air’s claim is contradictory.” did. Seong, chairman of the policy committee, also downplayed the “special mileage chartered flight” that Korean Air is discussing with the Ministry of Land, Infrastructure and Transport as “a temporary measure in the style of Sammosa Jo.” He added, “In the situation of the new coronavirus infection (Corona 19), Korean Air received employment maintenance subsidies from taxpayers’ taxes and emergency funds through a state-run bank, forgetting and mocking consumers. Isn’t it embarrassing?”
Following the criticism of Minister of Land, Infrastructure and Transport Won Hee-ryong the day before, Korean Air was in an emergency when the ruling party joined forces. As consumers still complain, there are voices calling for Korean Air to come up with additional measures as soon as possible. Even inside Korean Air, there is an air current that says that the direction of the improvement plan next week should be prepared at the earliest. The question is how carefully the government can look into the reform plan, which was remade with less than two months left before the implementation of the new reform plan. In fact, Korean Air is also discussing with the Ministry of Land, Transport and Maritime Affairs while considering a plan to delay the implementation of the new mileage system by several months.
Seong Tae-yoon, an economics professor at Yonsei University, said, “We need to consider delaying the introduction of the new system or giving more benefits to the mileage accumulated before the reform so that consumers and the market can accept it.”
Some point out that the Fair Trade Commission, which is in charge of the mileage system, caused this controversy by delaying the conclusion until now. Consumers requested a review, saying that the reorganization plan announced in December 2019 through consultations between Korean Air and the Fair Trade Commission was unfair, but a conclusion has not been reached for three years.
Some criticize whether the external pressure on private companies is excessive. An official from the airline industry said, “If seat sales are sluggish when 100 mileage special charters are deployed in addition to regular routes, it can lead to large-scale losses.” .
On the one hand, this controversy may spark sparks with other airline mileage policies. Low-cost carriers (LCCs), whose mileage validity period is around three years, which is relatively short compared to Korean Air (10 years), will have no choice but to pay attention to the government or politicians whenever the mileage system is reformed in the future.
Reporter Lee Kun-hyeok [email protected]
Reporter Jo Dong-ju [email protected]
