FTC Files Opinion to Dismiss Korean Air's Request to Ease 'Seat Maintenance Obligation' and Initiates Review

An examiner at the Fair Trade Commission (FTC) has issued an opinion recommending the rejection of Korean Air's request to ease the "obligation to maintain supplied seats," which was imposed as a condition for the business combination between Korean Air and Asiana Airlines.

Additionally, the examiner concluded that Korean Air's corporate entity and its executives and employees who obstructed the FTC's on-site investigation by deleting relevant data should be filed with prosecutors for criminal complaints.

The final decision and whether to impose sanctions are subject to review by the FTC's full committee.

The FTC's Secretariat announced that, following an examiner's review of two requests for modification of corrective orders submitted by five air transport operators—Korean Air, Jin Air, Asiana Airlines, Air Busan, and Air Seoul—it has submitted an examination report containing an opinion to dismiss the requests to the commission.

Accordingly, the FTC's deliberation procedures have been initiated, and the full committee is scheduled to make a final judgment.

When approving the business combination between Korean Air and Asiana Airlines, the FTC imposed a condition requiring them to maintain at least 90 percent of their 2019 seat levels.

However, the conditions stipulated that if significant and unavoidable circumstances arise due to natural disasters or external factors, a request to modify the corrective orders could be filed.

Korean Air requested that the obligation to maintain supplied seats across all routes for the year 2026 be exempted or eased, citing a contraction in airline passenger demand caused by soaring oil prices and exchange rates following the outbreak of the Middle East war in late February of this year.

In addition, late last year, the airline claimed that unavoidable circumstances had arisen due to external factors, requesting that for the Cheongju–Jeju route, maintaining supplied seats at 70 percent or more of the 2019 level be recognized as compliance with the obligation.

In response, based on ticketing records and other data, the examiner estimated total airline passenger demand for each route this year and determined that, despite adverse conditions such as the Middle East war, no overall contraction in demand was observed.

Furthermore, regarding the Cheongju–Jeju route, the examiner concluded that it is difficult to view that new circumstances justifying a failure to fulfill the corrective order have emerged since December 2024, when the corrective order was finalized.

Consequently, the examiner issued an opinion to dismiss the requests for modification of the corrective orders in both cases.

Obstruction of the investigation by Korean Air during the proceedings is also expected to be a key issue.

FTC investigators conducted an on-site inspection at Korean Air's headquarters in Gangseo-gu, Seoul, from February 2 to February 6 to investigate the case concerning the request to modify the corrective order for the Cheongju–Jeju route.

During this process, it was confirmed that three Korean Air employees deleted business computer files and e-mails related to the case between February 2 and 4.

The examiner deemed such actions to constitute "obstruction of investigation" under the Monopoly Regulation and Fair Trade Act, and submitted an opinion that both the Korean Air corporate entity and the three employees should be referred to prosecutors.

The FTC stated that it delivered the examination report to Korean Air today and will fully guarantee its right to defense through procedures such as submitting written opinions, applying to view and copy evidentiary materials, and providing opportunities to state opinions.

The FTC added that it plans to continuously monitor compliance with the corrective measures for the Korean Air-Asiana business combination to prevent consumer damage in the air passenger transport market.

Korean Air stated, "We plan to review countermeasures after receiving the examination report," adding, "We will also actively clarify that there was no obstruction of the investigation."

It further stated, "We will continue to make efforts to faithfully fulfill our obligations regarding the corrective measures going forward."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.