Miles that don't get you anywhere: Korean Air pushes customers to spend miles on products

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Miles that don't get you anywhere: Korean Air pushes customers to spend miles on products

Published: 13 Nov. 2024, 06:00

CHO YONG-JUN
cho.yongjun1@joongang.co.kr

Audio report: written by reporters, read by AI

A six-pack of Bibigo seolleongtang (ox bone broth and meat soup) is priced at 3,300 miles in the Korean Air store. [SCREEN CAPTURE]

Korean Air is encouraging customers to spend their miles as the airline awaits U.S. approval for its takeover of Asiana Airlines — just not on the actual flight tickets.

The airline has been adding new items for customers to spend their hard-earned mileage on in an attempt to reduce the total value of accumulated Korean Air and Asiana miles, estimated at 3.5 trillion won ($2.5 billion), as they count as a liability for the company.

In a merger and acquisition procedure, reducing debt is considered key, especially from the acquirer's perspective.

Korean Air kicked off its Skypass Deal on Sunday, a promotional event that allows customers to buy products for winter, such as humidifiers and hand warmers, meal kits, movie tickets and vouchers with Korean Air miles.

A six-pack of Bibigo seolleongtang (ox bone broth and meat soup) cost 3,300 miles, and heated blankets are listed for 6,800 miles, while Apple’s AirPods Pro 2 wireless earphones cost 51,200 miles. The airline will also provide discounts on Korean Air-branded merchandise and travel vouchers sold by Hanjin Travel, the travel agency subsidiary of Hanjin.

Apple's AirPods Pro 2 wireless earphones sold in the Korean Air store [SCREEN CAPTURE]

Even still, customers continue to spend their miles on flights, but there just are not enough seats for everyone.

Korean Air flew passengers on miles 4.17 billion kilometers (2.6 billion miles) in the first half of 2024, an 8.8 percent increase on year, while Asiana experienced a 26.4 percent increase in the same period with 1.7 billion kilometers traveled on miles.

But there are still not enough redeemable seats redeemable, say lawmakers. People Power Party Rep. Kwak Kyu-taek pointed out that an average of only 10.9 percent of the seats on a Korean Air flight were sold through miles in September, a decrease from the 11.8 percent recorded in the same month last year.

“I’ve been preparing to book bonus flights since a year ago, but the popular routes are difficult to book, and I ended up not being able to use up my miles,” a 43-year-old surnamed Lee said.

Korean Air blamed the increased accumulation of bonus miles in recent years on the advent of credit cards that gave miles.

“It is also difficult to open up more seats to be purchased on miles as the general demand for flights is increasing,” the airline said.

Consumers, despite the airline’s efforts, are also not spending their miles on things that are not airline tickets, as only 5.3 percent of the total miles used in the first half of 2024 were spent in superstores, shopping malls and hotels, according to data provided to Rep. Kwak. The rate has sat around 7 percent for the last three years.

The trend is rather unsurprising, as the miles are extremely undervalued when spent on anything but bonus flights: AirPods Pro 2, priced at 51,200 miles in the Korean Air store, are only 11,300 miles short of the 62,500 miles required to book a one-way business class flight to Europe or the United States — a seat that costs up to 4 million won. The wireless Apple earphones, on the other hand, cost just 349,000 won.

Asiana, on its part, is reducing ways to spend the miles: Asiana miles now can’t be spent at Emart, CGV and Sono Hotel & Resorts from September, and all 32 items at the OZ Mile Shop were sold out as of the time of reporting.

“[Airlines] should differentiate the places consumers can spend their miles depending on how many miles they have saved up to increase consumer satisfaction,” Inha University Consumer Science Prof. Lee Eun-hee said.

BY PARK YOUNG-WOO, CHO YONG-JUN [cho.yongjun1@joongang.co.kr]