Asiana Returns to Creditor Management... Pursuing 'Route Adjustment, Cost Reduction, and Organizational Restructuring'

[Asia Economy Reporter Kangwook Cho] Asiana Airlines has ultimately fallen back under creditor management after six years due to the failure of its sale. The creditors plan to restore Asiana Airlines through three measures: route adjustments, cost reductions, and organizational restructuring.

On the afternoon of the 11th, Choi Dae-hyun, Vice President of the Corporate Finance Division at the Korea Development Bank, stated in an online briefing, "The self-rescue plan for Asiana Airlines, based on external consulting results, includes three measures: route adjustments, internal cost reductions, and organizational restructuring."

Vice President Choi evaluated that Asiana Airlines has been implementing maximum self-rescue efforts since early this year through measures such as rotational leave, paid leave, and executives' salary returns and cuts. He explained that this could result in about 180 billion KRW in labor cost savings by the end of next month.

However, even with organizational restructuring, since the Industrial Stabilization Fund of approximately 2.4 trillion KRW will be provided, immediate workforce restructuring will not be conducted. If the fund is received, over 90% of employees must be retained for six months. Nevertheless, the market expects that workforce reductions through voluntary retirement will eventually proceed to improve the company's structure.

The separate sale of subsidiaries such as Air Seoul and Air Busan is also under consideration, as the prohibition of affiliate support is one of the conditions for receiving the Industrial Stabilization Fund.

Vice President Choi said, "When conducting consulting, the sale of subsidiaries will also be reviewed," adding, "Various areas including Air Seoul, Air Busan, and resorts including golf courses should be included within the scope of consulting for consideration."

However, he was reserved about the capital reduction of Asiana Airlines' shares.

Vice President Choi stated, "Capital reduction is a matter to be comprehensively reviewed in the future depending on the company's year-end financial status, creditor management situation, and whether M&A efforts are resumed. It is inappropriate to mention it at this time."

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