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Asiana fined for pushing a reservation system

Apr 19,2019
Asiana Airlines has been fined 40 million won ($35,200) for compelling tour companies to reserve tickets through a reservation system designated by the carrier.

According to the Fair Trade Commission (FTC), Asiana told tour companies that it would impose penalties if they did not use the Abacus global distribution system (GDS) to make reservations for tickets from June to October 2015.

A GDS is a global network that allows for direct transactions in the travel industry, such as those between travel agents and airlines. The GDS market is dominated by three platforms: Abacus, Amadeus and Travelport.

Asiana Airlines owns 80 percent of Asiana Sabre, formerly Asiana Abacus, but the FTC says the recent fine is related to the global GDS rather than the local subsidiary. Sabre acquired Abacus in 2015.

Tour companies are incentivized to use a single GDS as opposed to many as they receive a rebate based on the number of reservations made. Asiana pays a relatively low fee to Abacus, making it advantageous for Asiana to use Abacus.

The FTC said Asiana violated fair trade laws by abusing its position and ordered the fine. It said the actions led to reduced costs for the carrier while restricting the freedom of the tour companies and denying the tour companies higher GDS rebates.

“This measure is meaningful in that it punishes an airline that restricted the choice of tour companies and forced unfavorable measures to reduce costs for itself,” said the FTC in a statement.


BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]