Korean Air Faces Watchdog Review Over Alleged Seat Capacity Violations

South Korea's antitrust watchdog said on Wednesday it has begun deliberations on allegations Korean Air Lines failed to meet seat capacity requirements imposed as conditions for its takeover of Asiana Airlines. The Fair Trade Commission (FTC) said its examiner's report recommended taking actions against Korean Air, its affiliate Jin Air and Asiana Airlines for providing fewer than 90 percent of the seats offered in 2019 on routes connecting the central city of Cheongju and the southern resort island of Jeju between December 2024 and December 2025.

Under the merger conditions, the watchdog required the airlines to maintain seat capacity on designated routes at no less than 90 percent of corresponding 2019 levels, reports Yonhap news agency. The report found the airlines had violated the FTC's requirements and recommended imposing penalties for noncompliance and referring the case for criminal investigation. In a separate case, an examiner's report recommended rejecting Korean Air and four affiliated airlines' request to lower the minimum seat capacity requirement from 90 percent to 70 percent of 2019 levels on routes connecting Incheon and Busan to Guam.

The airline cited the declining popularity of the U.S. territory as a tourist destination in seeking the change. Examiners determined the circumstances did not meet the criteria for modifying the requirements. The commission will make its final decisions following deliberations at a plenary session after giving the affected parties an opportunity to present their defence. Asiana Airlines currently operates as a subsidiary of Korean Air. The two airlines are scheduled to merge into a single corporate entity on Dec. 17.

Meanwhile, South Korean stocks traded slightly higher late on Wednesday morning as easing oil prices provided some support, though elevated U.S. Treasury yields continued to weigh on investor sentiment. After opening 1.06 percent higher, the benchmark Korea Composite Stock Price Index (KOSPI) pared its earlier gains to trade up 17.62 points, or 0.26 percent, to 6,888.43 as of 11:20 a.m. Overnight, U.S. stocks ended slightly lower despite a decline in oil prices, as persistently high Treasury yields continued to weigh on investor sentiment.

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