S Korea FTC Orders Correction Of Unfair Practices On S Korea-Mongolia Route
05/27/2012| 11:15pm US/Eastern
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South Korea's antitrust regulator said Monday it has ordered Korean Air Lines Co. (003490.SE) and Miat Mongolian Airlines to correct their unfair practices in which they have colluded since late 2005 to prevent competitors from entering the routes between South Korea and Mongolia.
In a move to influence over bilateral talks between the two countries, "they have offered conveniences, including trip costs, for Mongolian government officials in charge of aviation talks (with Korea), their families and relatives," Yoon Soo-hyun, director of the Fair Trade Commission's International Cartel Division, said by telephone.
As a result, South Korea has failed to increase the number of flights on the Incheon-Ulan Bator route in the past talks with Mongolia by allowing other airlines such as Asiana Airlines Inc. (020560.SE) to provide services, the FTC said in a statement.
Asiana Airlines said the South Korea-Mongolian aviation talks should focus on promoting conveniences of passengers.
Korean Air and Miat Mongolian Airlines have charged higher rates for the Incheon-Ulan Bator route compared to routes which have a similar aviation range, said the statement. Customers have suffered higher ticket prices and lack of seats each summer, it said.
The FTC's deliberation result carries legal binding force, said Yoon.
-By Kyong-Ae Choi, Dow Jones Newswires; 822-3700-1903; kyong-ae.choi@dowjones.com
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