Asiana Airlines A380″/>Asiana Airlines Boosts Mileage Redemption options Ahead of Korean Air Merger
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In a strategic move to optimize its financial standing before its anticipated merger with Korean Air in 2027, Asiana Airlines is aggressively promoting mileage redemption, especially on key transpacific routes.This initiative aims to reduce the airlineS debt burden associated with outstanding mileage liabilities.
Strategic Mileage Flights to North America
Starting next month, Asiana Airlines will operate six dedicated mileage flights on the highly sought-after Incheon-Los Angeles (LA) and Incheon-New York routes. This translates to 495 seats specifically allocated for mileage redemption, incentivizing members to utilize their accumulated miles.Economy class seats will require 35,000 miles, while business class seats can be secured for 6,500 miles.
The deployment of mileage-dedicated flights on routes to the Americas is a calculated step to alleviate debt and streamline the integration process with Korean Air. Asiana Airlines plans to expand the mileage dedicated plane in the second half of the year and to expand mileage seats in general flights.
Mileage as a Financial Liability
Airline mileage programs are often viewed as a form of deferred revenue, representing a financial obligation for the airline. The potential integration of Asiana’s mileage system with Korean Air’s could pose a financial challenge if Asiana’s outstanding mileage balance is ample.
Past Successes and Future expansion
Asiana airlines has already seen success with similar initiatives. A recent promotion on domestic routes between Gimpo and Jeju, offering 38,000 mileage seats across four promotional periods, achieved an notable average reservation rate exceeding 92%. This positive response has encouraged the airline to expand its mileage redemption offerings.
Consumer Considerations and Potential Mileage Devaluation
Concerns have been raised regarding the potential devaluation of Asiana Airlines mileage if not utilized before the merger. With an estimated 1 trillion won in unused mileage,passengers are advised to consider redemption options proactively.
Aviation industry experts suggest that a 1:1 integration ratio between the two airlines’ mileage programs may not be feasible, potentially disadvantaging Asiana Airlines mileage holders. An aviation industry official stated:
It is vital for consumers to use the mileage as possible before the integration. If the chance is reduced, bonus ticket reservation may be difficult, so you need to prepare for reducing the opportunity to use mileage.
Aviation Industry Official
The integration of airline loyalty programs is a complex process, frequently enough involving adjustments to mileage values and redemption policies.For example, when Alaska Airlines acquired Virgin America, changes were made to the Virgin America Elevate program, impacting mileage earning and redemption rates.
Korean Air’s Outlook
Cho Won-tae, chairman of Korean Air, has acknowledged the complexities of the integration process and assured stakeholders that a fair and reasonable integration plan is being developed. He stated:
We are drawing a reasonable integration plan.We will announce the integration plan soon.
Cho Won-tae, chairman of Korean Air
the aviation industry is closely watching the merger of Asiana Airlines and Korean Air, as it will reshape the competitive landscape in the region. The successful integration of the two airlines’ operations,including their mileage programs,will be crucial for the long-term success of the merged entity.