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Photo: Asiana Airlines headquarters / Courtesy of Asiana Airlines |
[Alpha Biz= Paul Lee] SEOUL, August 10 — Asiana Airlines is ramping up efforts to encourage customers to redeem their mileage points ahead of its planned merger with Korean Air, as unredeemed miles represent a significant liability on the company’s balance sheet. As of the first quarter, Asiana’s mileage-related liabilities totaled approximately KRW 950 billion.
Airline miles, accumulated through ticket purchases and co-branded credit card usage, may appear to consumers as a simple reward. However, in accounting terms, they are recorded as “unearned revenue” or “contract liabilities.” The issue, from the company’s perspective, is that these are effectively interest-free debts — remaining on the books until customers use them. The more miles remain unused, the greater the financial burden.
To reduce this liability, Asiana has expanded everyday redemption options, eased seat availability for award tickets, introduced mileage payments for pet travel services, and launched mobile gift vouchers. These initiatives are designed to encourage customers to spend their miles and lower the company’s outstanding obligations.
Korean Air and Asiana Airlines plan to unify their mileage programs when the merger is completed next year. However, passengers from both carriers have expressed concerns over potential changes to conversion rates, accrual standards, and redemption options under the new integrated system.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
