Asiana Airlines Reports Operating Loss of 368.3 Billion KRW Last Year... Significant Deficit Expansion

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[Asia Economy Reporter Yu Je-hoon] Asiana Airlines announced on the 12th that its operating loss on a separate basis last year widened to 368.3 billion KRW compared to the previous year. During the same period, sales decreased by 4.0% to 5.9538 trillion KRW, and the net loss also widened to 672.7 billion KRW.

Asiana Airlines cited the reasons for the expanded deficit last year as ▲decline in passenger profitability due to the Korea-Japan conflict in the second half of the year and the supply expansion of low-cost carriers (LCCs) ▲cargo sales slump caused by global economic slowdown and decrease in cargo volume due to the US-China trade dispute ▲increase in foreign currency expenses due to exchange rate rise ▲increased investment for improving punctuality and safe operation.

An Asiana Airlines official said, "With the slow recovery of demand on Japan routes and the overall contraction of passenger demand due to COVID-19, the domestic aviation industry is facing difficulties," adding, "However, despite external difficulties, Asiana Airlines expects that upon completion of the merger and acquisition this year, large-scale new capital inflow and cost structure improvement will further strengthen financial stability and profitability."

Accordingly, Asiana Airlines has set its management policy for this year as 'A New Start 2020' and plans to enhance profitability. First, Asiana Airlines will sequentially dispose of and return aging aircraft this year and strengthen fuel cost savings and fleet competitiveness by introducing new aircraft (3 A350s, 4 A321neos).

By division, the passenger business will sequentially suspend flights and reduce frequencies due to COVID-19, while actively attracting alternative routes and transfer demand. Monitoring of unprofitable routes will be strengthened, and profitable charter routes will be actively developed. In addition, a dedicated premium sales organization will be established to attract premium demand and improve profitability.

The cargo business plans to secure stable demand for new growth export items such as 5G, artificial intelligence (AI), and foldable display components, continue collaboration with global companies, operate flexible routes, and expand the network through interlining on non-served sections to strengthen the profit base.

In particular, if the sale and acquisition procedures are completed this year, capital inflow of 2.2 trillion KRW will significantly improve the debt ratio, followed by credit rating upgrades and increased investments for profit improvement.

An Asiana Airlines official said, "We expect performance improvement through HDC Group’s passenger commercial and cargo demand attraction as well as new business synergy with the Hyundai family," adding, "We will strive to develop competitive products."

This content was produced with the assistance of AI translation services.