Skypass Program Changes
#109




Join Date: Mar 2007
Location: ORD
Programs: SkyTeam Elite Plus lifetime
Posts: 127
Korean FTC orders KE to correct unfair practices in Skypass devaluation
As reported before, in early 2020 the Korean Fair Trade Commission expressed concern that the Skypass devaluation was an unfair practice and recommended that Korean Air address the matter (this has no legal power, but it is very unusual for companies to ignore such recommendations). Unlike courts in the U.S., the KFTC has an established precedent that miles constitute monetary rights -- a form of currency owned by the customers who hold them (and not by the airlines or the issuers of the miles). In May 2020, KE re-submitted an unrevised plan to the KFTC, ignoring all recommendations, and bulldozed ahead with their devaluation plan. This triggered an escalation where the KFTC launched a proper full-fledged investigation of the new terms and conditions.
Now the situation has changed. KE needs to be in the good graces of the KFTC because KE needs the KFTC to approve its merger with Asiana. KE attempted to circumvent this problem by delaying the devaluation by 2 years (so that the KE-OZ merger would be safely settled by the time KE goes to war with the KFTC over Skypass devaluations), but the KFTC said no dice. The KE-OZ merger and the Skypass devaluation are separate independent matters, but the KFTC has stated that guaranteeing fair financial value for customers in the mileage program(s) is part of their antitrust considerations in the KE-OZ merger, and that they want changes in the Skypass program to be settled with terms that are fair to consumers prior to any conclusive evaluation of the effects of the KE-OZ merger on consumer rights.
As such, after a year of investigation, the KFTC is now ordering KE to correct what the KFTC deems unfair practices in the Skypass devaluation. Again, this is not legally binding, and KE can refuse, but then the KFTC can take KE to the courts. KE likely wants to avoid such confrontations at all costs. KE is continuing to plead their case that they have not in fact devaluated customers' financial rights, but has pledged to work with the KFTC's process. The necessary adjustments to the new Skypass terms and conditions are to be finalized by March.
News report in Korean: https://news.mt.co.kr/mtview.php?no=2021012918303626553
Now the situation has changed. KE needs to be in the good graces of the KFTC because KE needs the KFTC to approve its merger with Asiana. KE attempted to circumvent this problem by delaying the devaluation by 2 years (so that the KE-OZ merger would be safely settled by the time KE goes to war with the KFTC over Skypass devaluations), but the KFTC said no dice. The KE-OZ merger and the Skypass devaluation are separate independent matters, but the KFTC has stated that guaranteeing fair financial value for customers in the mileage program(s) is part of their antitrust considerations in the KE-OZ merger, and that they want changes in the Skypass program to be settled with terms that are fair to consumers prior to any conclusive evaluation of the effects of the KE-OZ merger on consumer rights.
As such, after a year of investigation, the KFTC is now ordering KE to correct what the KFTC deems unfair practices in the Skypass devaluation. Again, this is not legally binding, and KE can refuse, but then the KFTC can take KE to the courts. KE likely wants to avoid such confrontations at all costs. KE is continuing to plead their case that they have not in fact devaluated customers' financial rights, but has pledged to work with the KFTC's process. The necessary adjustments to the new Skypass terms and conditions are to be finalized by March.
News report in Korean: https://news.mt.co.kr/mtview.php?no=2021012918303626553
Last edited by EPR-QG; Feb 4, 2021 at 6:36 pm
#110

Join Date: Nov 2015
Location: New york, NY
Programs: Korean Air Morning Calm, Hertz President's Circle, Avis Preferred Plus and IHG Spire Ambassador
Posts: 137
https://www.koreanair.com/us/en/foot...5-mcextension#
Can someone clarify this 1yr "extension"? Didn't they already extend qualification for another 6mo?
Can someone clarify this 1yr "extension"? Didn't they already extend qualification for another 6mo?
#111

Join Date: Nov 2015
Location: New york, NY
Programs: Korean Air Morning Calm, Hertz President's Circle, Avis Preferred Plus and IHG Spire Ambassador
Posts: 137
https://www.koreanair.com/us/en/foot...5-mcextension#
Can someone clarify this 1yr "extension"? Didn't they already extend qualification for another 6mo?
Can someone clarify this 1yr "extension"? Didn't they already extend qualification for another 6mo?
#112
Original Poster




Join Date: Dec 2010
Location: Gangnam-gu, Seoul, Korea
Programs: KE Skypass Morning Calm Member, OZ Club
Posts: 2,381
like mine just expired end of April
And I got TWO YEARS for actually hitting morning calm (before Rona before my period was up)
And then the extra year
So I'm good until April 2024
#113




Join Date: Mar 2007
Location: ORD
Programs: SkyTeam Elite Plus lifetime
Posts: 127
Korean Fair Trade Commission bans unfavorable changes in SkyPass for 10 years
https://www-yna-co-kr.translate.goog...ko&_x_tr_tl=en (This is Korea's equivalent of Associated Press)
As a precondition for approving the KE-OZ merger, the KFTC has banned changes in the SkyPass program that is deemed unfavorable to customers relative to the policy in effect at the end of 2019 at the two airlines. This restriction is valid for 10 years starting from the date of completion of the KE-OZ merger (the date on which KE completes the acquisition of OZ stock). Furthermore, any scheme for converting OZ miles to KE miles during the merger is subject to KFTC approval. The quality of service may also not be reduced, including seat pitch, free in-flight meals, free checked luggage, and lounge access.
It's not evident from this article, but KE's stance (according to statements issued to other outlets) is basically that they are complaining about the 10-year restriction on SkyPass changes on the basis of customer benefits (yeah, sure) and global competitiveness (obviously), but they are overall accepting the KFTC's ruling (and planning to negotiate the implementation details with KFTC behind the scenes) because it's the only way the KE-OZ will be allowed to move forward. They probably want this to be a done deal before the next administration (Korea is just a couple weeks away from the next presidential election).
As a precondition for approving the KE-OZ merger, the KFTC has banned changes in the SkyPass program that is deemed unfavorable to customers relative to the policy in effect at the end of 2019 at the two airlines. This restriction is valid for 10 years starting from the date of completion of the KE-OZ merger (the date on which KE completes the acquisition of OZ stock). Furthermore, any scheme for converting OZ miles to KE miles during the merger is subject to KFTC approval. The quality of service may also not be reduced, including seat pitch, free in-flight meals, free checked luggage, and lounge access.
It's not evident from this article, but KE's stance (according to statements issued to other outlets) is basically that they are complaining about the 10-year restriction on SkyPass changes on the basis of customer benefits (yeah, sure) and global competitiveness (obviously), but they are overall accepting the KFTC's ruling (and planning to negotiate the implementation details with KFTC behind the scenes) because it's the only way the KE-OZ will be allowed to move forward. They probably want this to be a done deal before the next administration (Korea is just a couple weeks away from the next presidential election).
Last edited by EPR-QG; Feb 22, 2022 at 3:15 pm
#114




Join Date: Mar 2007
Location: ORD
Programs: SkyTeam Elite Plus lifetime
Posts: 127
Korean Air plans to ignore the KFTC's order
According to a source, Korean Air is planning to force its way through the Skypass devaluation, ignoring the KFTC's conditional approval of the KE-OZ merger that bans unfavorable changes for 10 years. The hope is that the KFTC will not do anything to enforce their decision, especially under the new conservative government that does not care about consumer protections. Everyone should burn their miles ASAP before the devaluation.
#115




Join Date: Feb 2008
Location: Kobe, Japan
Programs: Bonvoy Titanium, IHG Diamond., Hyatt Disc., Choice Plat., UA Silver/KE/AK/DL
Posts: 1,973
According to a source, Korean Air is planning to force its way through the Skypass devaluation, ignoring the KFTC's conditional approval of the KE-OZ merger that bans unfavorable changes for 10 years. The hope is that the KFTC will not do anything to enforce their decision, especially under the new conservative government that does not care about consumer protections. Everyone should burn their miles ASAP before the devaluation.
#116




Join Date: Mar 2007
Location: ORD
Programs: SkyTeam Elite Plus lifetime
Posts: 127
Korean Air folds under pressure from government
Facing harsh criticism from two ministers, KE has indefinitely delayed the impending devaluation and will spend the next few months coming up with an "improved" new Skypass plan. According to industry insiders, it will likely keep the distance-based redemption structure but will tone down the devaluation of existing miles. Since they were claiming to offset the devaluation by awarding bonus miles to elites and high revenue passengers in the previously announced "New Skypass" plan, my personal guess is that they will have to reduce the mileage accrual rate across the board in order to match a lower redemption rate, but existing miles will not be devalued as badly.
Article in Korean: https://www.chosun.com/economy/indus...FGLPMJQQHKMPE/
Article in Korean: https://www.chosun.com/economy/indus...FGLPMJQQHKMPE/
#117


Join Date: Jan 2011
Posts: 2,657
Facing harsh criticism from two ministers, KE has indefinitely delayed the impending devaluation and will spend the next few months coming up with an "improved" new Skypass plan. According to industry insiders, it will likely keep the distance-based redemption structure but will tone down the devaluation of existing miles. Since they were claiming to offset the devaluation by awarding bonus miles to elites and high revenue passengers in the previously announced "New Skypass" plan, my personal guess is that they will have to reduce the mileage accrual rate across the board in order to match a lower redemption rate, but existing miles will not be devalued as badly.
Article in Korean: https://www.chosun.com/economy/indus...FGLPMJQQHKMPE/
Article in Korean: https://www.chosun.com/economy/indus...FGLPMJQQHKMPE/
#118




Join Date: Mar 2007
Location: ORD
Programs: SkyTeam Elite Plus lifetime
Posts: 127
Well, the entire "New Skypass" program has been scrapped, so until they announce what new reforms will replace it (my understanding is that they are trying hard to find some careful balance that can pass muster with the populist politicians and regulatory officials pressuring them), the million miler system remains exactly as it was under the legacy Skypass program. For what it's worth, even if the "New Skypass" program had gone into effect as planned, all existing Morning Calm Premium and Million Miler statuses (achieved by the end of 2024) were going to be grandfathered as lifetime Gold and Platinum respectively under the new program, and whatever replaces this now-scrapped reform cannot be worse, so I presume we can safely assume a similar level of grandfathering as long as the statuses are reached within the next couple of years.
#119


Join Date: Jan 2008
Posts: 2,545
KE Skypass program future
KE Skypass program , whats the future of it ?
A few years ago, KE was going to revamp it and do away with lifetime qualifications.
But the old/current program is still going on...
KE still going to kill off the old/current program?
A few years ago, KE was going to revamp it and do away with lifetime qualifications.
But the old/current program is still going on...
KE still going to kill off the old/current program?
#120


Join Date: Jul 2007
Location: Berlin
Programs: LH SEN, BA Gold, SK Gold; Accor Diamond; IHG Diamond-Amb; Meli/HH/Bonvoy Gold
Posts: 5,682
There haven't been any new posts in the past six months, but this is the thread you need:
Skypass Program Changes
Skypass Program Changes

