Korean Air Plans To Convert Some Asiana Miles At Less Than 1:1 Ratio

Korean Air, a SkyTeam member airline, acquired close to 64% of its rival Asiana, a Star Alliance member, back in December (read more here). The company has a four-year plan to consolidate all five airlines into two (two full-service airlines and three LCCs).

There has not been much communication on how the frequent flyer plans are consolidated, but it is certain that Asiana will exit Star Alliance, and its brand will eventually disappear (both unfortunate).

You can access Korean Air here, and Asiana here.

Now, there is news coming from South Korea on how the mileage pooling between these two airlines will work, and I don’t think that it is entirely fair to Asiana members, as only flown miles would be merged at a 1:1 ratio while others at a less favorable rate per reports on the South Korean media.

Here’s an excerpt from the JoongAng Daily:

“Korean Air is working to implementing a 1:1 ratio for transferring Asiana miles, though the details are still under discussion,” a source with knowledge of the matter told the Korea JoongAng Daily.

The source did not provide specific details about the transfer of miles acquired through credit cards but added that the ratio will be “lower than the 1:1 ratio.”

I don’t quite understand why the value of other miles, such as the ones from cards, wouldn’t be converted at the same ratio.

Korean Air has until mid-June to submit detailed plans of the integration process to the Fair Trade Commission for approval, including the mileage transfer, which has remained one of its nuisances.

The country’s largest carrier declined to confirm the plan but said that “nothing has been decided” and it is speaking with “consulting firms for a suitable transition ratio,” adding that the fixed rate will be announced by the second half of the year.

Why would any conversion ratio other than 1:1 be acceptable? This doesn’t make much sense.

Unused Korean Air miles stood at 2.55 trillion won as of the end of September last year, which it reflected as deferred revenue, a type of liability, in the carrier’s financial statements. Asiana’s came in at 981.9 billion won.

The deferred liability of these miles on Korean Air’s books stood at $1.8B and Asiana’s at $679M at the end of 2024.

Conclusion

The only right thing for the Korean Air, which is dismantling the Asiana brand that will lead to higher prices and fewer choices for those traveling to/from Korea and Asia, is to merge the miles between these two programs at 1:1.

Why would they even consider any other ratio as something difficult to understand, and why would this be a “nuisance” for the Korean Air?

It is unfortunate for all travelers that Korean Air was allowed to buy its domestic rival and essentially form a monopoly, which doesn’t bode well for airfares to/from Korea.

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