"Gone in a Second, How Are We Supposed to Book?": Accumulated but Unusable Mileage Flight Tickets

1. "Failed Even When Trying Right at 9 AM 364 Days in Advance"… Worsening Mileage 'Gone in a Second' Scarcity

Consumers attempting to book long-haul Prestige (business) class seats—often considered the highlight of overseas travel—using steadily accumulated mileage are expressing strong frustration after repeatedly failing to secure reservations. Not only do seats vanish within a second as soon as the booking system opens at 9 a.m., 364 days prior to departure, but booking failures also occur even when customer service representatives assist by manually attempting simultaneous bookings.

Mileage accumulated by consumers over several years is undoubtedly a legitimate right, but in moments of greatest need and on popular routes, it is being reduced to something virtually useless.

2. Over 4.0667 Trillion Won in 'Book Debt' Alone… Unearned Revenue Hits Record High

According to the Financial Supervisory Service's electronic disclosure system, as of the first half of this year, the mileage liability (unearned revenue) of South Korea's two major airlines reached approximately 3.1199 trillion won for Korean Air and about 946.8 billion won for Asiana Airlines, totaling approximately 4.0667 trillion won. This marks the first time that the combined mileage liabilities of the two carriers have surpassed 4 trillion won since the introduction of mileage programs in South Korean airlines.

While accrued mileage surged as outbound travel demand rebounded explosively following the pandemic, the rate at which consumers redeem miles has failed to keep pace with accumulation, causing the airlines' accounting debts to balloon significantly.

3. Why Can't It Be Used When Desired? The Accounting Paradox of 'Allocating Predicted Remaining Seats'

The paradox where consumer entitlements reach 4 trillion won while actual seats are unavailable stems from airline mileage seat allocation and accounting practices. Airlines do not recognize mileage as sales revenue immediately; instead, they defer it as a liability called "unearned revenue" for services to be provided in the future. This liability is only recognized as airline revenue when customers use miles to board flights or when the mileage expires.

Asiana Airlines states that it determines the number of mileage seats differently by season, day of the week, and flight based on past boarding data, allocating mileage seats primarily from "spare seats expected to remain at the time of departure." As airlines severely restrict mileage seats during peak seasons and on popular routes to maximize cash sales, an abnormal structure has become entrenched—where airlines protect cash revenue while leaving customers with a "4 trillion won promise that cannot be exercised."

4. Anxiety Among Asiana Mileage Holders: '10-Year Separate Operation' and Limitations of Conversion Ratios

Ahead of the launch of the integrated Korean Air, Asiana Airlines mileage holders are experiencing the greatest anxiety. The core of the integration plan proposed by Korean Air is to operate existing Asiana mileage separately for 10 years rather than forcibly extinguishing it upon the merger. Consumers can book Korean Air flights according to existing Asiana redemption criteria, or convert miles to SKYPASS (Korean Air's mileage program) at a ratio of 1:1 for flight-accumulated miles and 1:0.82 for partner-accumulated miles.

However, even with a 1:1 conversion ratio, the "real value" perceived by consumers is not necessarily preserved. Existing mileage accrued through partners is reduced by applying a 1:0.82 ratio when converting to SKYPASS. Moreover, if the seats available for purchase with mileage remain scarce or if the redemption standards required for award tickets are raised, the real value of consumers' entitlements will inevitably face a double decline. Korean Air proposed a plan to maintain the supply of award tickets and seat upgrades available through existing Asiana mileage at or above pre-merger levels, but the Fair Trade Commission determined that this alone is insufficient.

5. The Fair Trade Commission's Strict Scrutiny: The History of Over 6.4 Billion Won in Penalties and Demands for Improvements

The Fair Trade Commission judged that abstract promises such as Korean Air's "supplying award tickets at or above existing levels" are insufficient to prevent consumer harm. The commission demanded that Korean Air submit concrete supplementary measures guaranteeing practical usage, detailing the criteria and scale under which mileage seats will be supplied and managed.

The reason the Fair Trade Commission is setting such demanding verification standards is due to precedent. The two airlines were recently fined over 6.4 billion won in performance enforcement penalties for failing to meet seat supply criteria on a specific route (Incheon – Frankfurt), which was a condition for merger approval. Given their history of breaching total seat supply commitments, the commission is applying strict standards to ensure the actual right to use mileage.

6. Checking FTC Final Approval Precedes Rushing to Exhaust Miles

Even as the merger proceeds, Asiana mileage holders do not face immediate disadvantages and need not rush to spend their miles on low-value goods. This is because existing miles will remain valid for 10 years after the merger.

However, the existing 10-year validity period will not be extended and will apply as is, while terms for using partner airlines such as Star Alliance may change. Therefore, it is safest to decide on converting to SKYPASS or determining how to use miles after checking the finalized redemption chart and the corrective action plan for mileage integration approved by the Fair Trade Commission.


Deep Dive Q&A
Q1. From the perspective of Asiana mileage holders, should they spend miles before the merger, or is it advantageous to hold onto them?

A1. There is no need to rush to spend them on low-value goods. Even after the integration, existing Asiana mileage will be maintained under a separate system for 10 years, and booking Korean Air award tickets will be possible under Asiana redemption criteria. However, the existing validity period of the miles (10 years) will not be extended, and terms for using partner airlines (such as Star Alliance) may change. If considering conversion to SKYPASS, it is advantageous to make a decision after the Fair Trade Commission's final approval terms and the confirmed redemption chart are announced.

Q2. Is it not possible to legally mandate that airlines allocate a certain percentage or more of seats for mileage?

A2. Because mileage is classified as unearned revenue liability based on private contracts and airline terms and conditions, there are limitations to direct legal regulations mandating that a specific percentage of total seats be allocated exclusively for mileage. However, the Fair Trade Commission indirectly pressures seat supply by prohibiting reductions in total seat supply as a condition of merger approval (requiring maintaining over 90% compared to 2019) and imposing enforcement fines in case of violations. Furthermore, in the approval process for the mileage integration plan, the commission is encouraging practical seat allocation by assessing whether the supply of award seats and seat upgrades is sufficient, with the possibility of rejecting the integration plan itself if found inadequate.
※ Please note: This article was translated by AI and may contain errors.