Asiana Airlines (OZ, Seoul Incheon) has lost a legal battle to avoid a KRW8.1 billion won (USD6.13 million) fine over a 2016 catering contract signed with Gate Gourmet Korea (GGK). The transaction saw GGK pick up exclusive catering rights at Asiana Airlines in exchange for acquiring KRW160 billion (USD121.1 million) worth of warrants in another subsidiary of Asiana's parent company, Kumho Asiana Group (Kumho).

In 2015, a Kumho acquisition vehicle required capital to fund its planned acquisition activities. Kumho issued a 30-year inflight catering contract in exchange for the successful bidder agreeing to put equity into their acquisition company by purchasing warrants. The successful bidder was GGK, a joint venture between the Switzerland-based Gate Group (operators of the Gate Gourmet brand), HNA Group, and Asiana Airlines. GGK proceeded to purchase the warrants bearing a 0% interest rate.

The long-time caterers, LSG Sky Chefs (a subsidiary of Lufthansa (LH, Frankfurt International)), generated most of its revenue from providing Asiana Airlines, plating up 30,000 plus meals per day, but declined to participate in the warrants deal. After losing the contract, they complained to the South Korea Fair Trade Commission (FTC).

In its subsequent investigation, the FTC found Kumho's acquisition vehicle received a financial benefit of KRW16.2 billion (USD12.3 million) from the transaction. Asiana argued the GGK deal was merely "more favourable" despite the below-market (0%) interest rate attached to the warrants. The details of the catering deal found its way into South Korea's mainstream media in 2018 when a fire at GGK's plant near Seoul Incheon caused massive disruptions to the supply of inflight meals. Consequently, Asiana sued the former management of Gate Group for conspiring with their parent company and its then chairman, Park Sam-koo.

The Fair Trade Commission found the deal breached the normal competitive tendering process, fining Asiana Airlines half the financial benefit it received, and ordered it to publish a corrective notice. Asiana appealed that outcome. South Korea's Asia Economy outlet reports that on June 1, Judge Hwang Eui-dong of Seoul High Court's Administrative Division upheld the fine.

In his ruling, the judge said the deal enabled Asiana to acquire affiliated entities, reduced competition, and strengthened the carrier's market position. The judge also pointed the finger at the now-disgraced former chairman Park, saying he was involved in and led the transaction. Park was sentenced to ten years imprisonment last 2022 on unrelated corruption charges but remains at liberty on bail pending an appeal.