[2026 National Assembly Audit] Korean Air Refuses to Submit Details on Expired "4 Trillion Won in Miles"... Ministry of Land, Infrastructure and Transport: "Will Review with Fair Trade Commission"

The U.S. orders four major airlines to report mileage expiration and award-seat data

Questions were raised during a National Assembly audit over Korean Air's failure to disclose how many unused miles expire each year, how many award seats it allocates, and how often customers fail to book them, citing trade secrets despite holding 4 trillion won in unused miles owed to customers.

At a comprehensive audit by the National Assembly's Land, Infrastructure and Transport Committee on October 23, Democratic Party of Korea lawmaker Jeon Yong-gi called Korean Air Vice President Choi Jeong-ho as a witness and questioned him about mileage expirations and the allocation of award seats.

Korean Air B777-300ER. Korean Air

Korean Air's financial statements currently list approximately 4 trillion won in unused miles as deferred revenue (a liability). If customers do not use their miles and they expire after 10 years, the liability is converted into airline revenue.

Jeon’s office requested information in 22 categories across four areas, including the amount Korean Air recognized as revenue when unused miles expired, its calculation method, and the number of failed award-ticket bookings. Korean Air did not provide the information, citing trade secrets.

"Credit card companies report to financial authorities how many points are accumulated and expire, and the authorities develop measures to address expirations. But miles that airlines sell to credit card companies for money have fallen into a blind spot," Jeon said. "I’m asking them to let me use my property before it all disappears in 10 years, or to tell me how much is disappearing. Why can’t they disclose that?"

"We disclose the figures as deferred revenue, and all airlines classify the details as sensitive information," Vice President Choi replied. Jeon also challenged Korean Air's earlier explanation that its 10-year mileage validity period was longer than those of other airlines. Choi responded, "It’s not just a matter of the validity period; accumulation and expiration are all interconnected. Overall, Korean Air’s mileage program is more favorable than those of other airlines."

However, an analysis by Jeon’s office of mileage programs at major international airlines found that Delta Air Lines, United Airlines, Southwest Airlines and JetBlue in the United States had no expiration dates for miles. American Airlines (24 months) and British Airways (36 months) do have expiration periods, but any mileage-earning or redemption activity during the period extends the validity of all miles in an account, effectively making them valid indefinitely. Singapore Airlines and Emirates were among the few airlines where miles expire within three years.

Questions were also raised about the criteria for allocating award seats and the effectiveness of penalties. According to Jeon, Korean Air submitted a document to the Korea Fair Trade Commission pledging to keep at least 5% of its seats available for mileage bookings.

Jeon said that applying this standard to a large aircraft with 400 seats, such as the A380, would mean 20 seats, while on a smaller, 150-seat aircraft, it would mean just seven or eight seats. "Does setting a target of 5% mean that you aren’t even meeting 5% now? The public wouldn’t know even if you allocated only two or three seats out of 150," he said.

"Korean Air has already been ordered to pay 18.5 billion won in penalty payments for violating the fare-increase cap and seat-supply requirements imposed as corrective measures for its business combination," he added. "If you conceal 4 trillion won in miles and leave them unusable, that money becomes entirely the company’s. Even if you break your pledge to the Fair Trade Commission, wouldn’t you just have to pay a fine of around 18 billion won, about 0.45% of the 4 trillion won?"

Vice President Choi said that over the past three years, mileage passengers accounted for an average of more than 10% of all passengers, and explained that the 5% figure submitted to the Fair Trade Commission was a minimum that Korean Air would maintain even during peak season. Jeon responded, "If you reached 10%, you could submit the relevant data. Why can’t you disclose it?"

The Korea Fair Trade Commission also said in a written response to Jeon’s office that "a lack of information on mileage accumulation, use and expiration, as well as on the actual possibility of using miles, could constrain consumers’ ability to make rational decisions and use their miles." In September 2024, the U.S. Department of Transportation issued a special reporting order requiring the country’s four largest airlines to submit information on mileage expirations, proceeds from sales to credit card companies, award-seat allocations, and the impact of mileage expirations on airline finances.

Hong Ji-seon, Minister of Land, Infrastructure and Transport, said, "We have made additional inquiries into what information local airlines submitted in response to measures raised in the United States and what follow-up actions were taken. We will review, together with the Fair Trade Commission, options that could also be applied in Korea."

This content was produced with the assistance of AI translation services.