Korean Air, Asiana Fined for Blocking Budget Carriers (Update1)
March 11, 2010, 12:46 AM EST(Adds rivals in fourth paragraph.)
By Kyunghee Park
March 11 (Bloomberg) -- Korean Air Lines Co. and Asiana Airlines Inc., the nation’s two biggest carriers, were fined a combined 11 billion won ($9.7 million) for anticompetitive actions against start-up budget carriers.
The two airlines told travel agents they would be allocated fewer seats during the peak season if the agencies also sold tickets on low-fare carriers, the Fair Trade Commission said today in an e-mailed statement. Seoul-based Korean Air was fined 10.4 billion won and Asiana 640 million won.
Korean Air and Asiana have also set up their own budget units to lure passengers away from new low-fare carriers, who threatened to challenge their market share, which stood at a combined 90 percent in 2008. Two of six low-fare airlines that have begun operations in Korea in the last four years have already closed.
Jeju Air, Hansung Airlines and Yeongnam Air as well as some overseas carriers were targets of Korean Air’s and Asiana’s actions, the commission said. The trade body will continue to monitor the market, it said.
No one was immediately available for comment at either Korean Air or Asiana.
Korean Air gained as much as 1.6 percent to 64,300 won and traded at 63,400 won as of 2:03 p.m. in Seoul. Asiana advanced as much as 3.5 percent to 4,295 won.
--With assistance from Kyung Bok Cho in Seoul. Editors: Neil Denslow, Douglas Wong
To contact the reporter on this story: Kyunghee Park in Hong Kong at kpark3@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
