South Korea's Fair Trade Commission (FTC) has begun reviewing Korean Air's (KRX:003490) alleged failure to meet a seat-capacity threshold imposed as a condition for its merger with Asiana Airlines (KRX:020560).

The antitrust watchdog on Wednesday said its examiner found that Korean Air, its affiliate Jin Air (KRX:272450), and Asiana Airlines lowered seat capacity on the Cheongju-Jeju route below the required 90% of 2019 levels between December 2024 and December 2025.

The examiner proposed enforcement fines and criminal complaints against the carriers, according to the release.

The FTC said the final decision was yet to be taken, which will follow deliberations.

Shares of Korean Air Lines fell nearly 3%, while those of Asiana Airlines declined nearly 2% in recent trade.