Asiana Airlines, marking its 30th anniversary this year, is seeking to find a breakthrough in the operation of long-haul flights. The move is a part of the Korean flag-carrier’s strategy to avoid a cutthroat competition from low cost carriers.
At a meeting with reporters on the occasion of the airliner’s 30th anniversary, Asiana Airlines President Kim Soo-cheon said, “(We’re) making preparations for a new 30-year period as a long-haul flight carrier by introducing the state-of-the-article aircraft, including A250s.”
Asiana Airlines will fly routes operated only by Korean Air, he added.
Asiana Airlines will launch a flight between Seoul and Venice, Italy, and another between Seoul and Barcelona, Spain, in May and August, respectively. President Kim said, “Out of 30 long-haul flight routes operated by Korean Air, there are only 12 flight routes Asiana Airlines also fly.”
Asiana Airlines will join Korean Air’s exclusive flight routes to give customers more choice, he added. Kim said Asiana Airlines will raise the portion of long-haul flights from the current 50 percent to 60 percent by 2022.
Asiana Airlines will increase the number of aircraft flying long-haul flights from 21 to 32 during the period, while raising the number of flight routes from 14 to 19, according to the president.
On the other hand, Asiana Airlines plans to maintain its investments in short- and medium-haul flights at current levels. Instead, the airliner plans to put next-generation aircraft A321NEOs in short- and medium-flight routes to raise its unit-price competitiveness. A321NEOs are known to be 14 percent more efficient in terms of fuel consumption. Asiana Airlines has a strategy to put medium- and large-sized aircraft in such lucrative flights as those to Taipei, Da Nang and Hanoi to differentiate itself from low cost carriers. Low cost carriers occupy more than 40 percent of the market in Southeast Asian flight routes while commanding about 60 percent of domestic routes.
Asiana Airlines plans to get a plan to restore management this year. The initiative to get back on track was launched in 2016 with the goal of turning the airliner around with. Asiana Airlines has so far merged or eliminated domestic branch offices by one-third, while restructuring 17 flight routes that do not yield profits. The step had an effect of improving its financial soundness worth about 400 billion won by the end of last year.
But Asiana Airlines is struggling to cope with short-term loans. The airliner saw its borrowings fall from 4.43 trillion won to 4.05 trillion won, but its short-term loan borrowings increased from 1.71 trillion won to 2.02 trillion won.
The airliner plans to dispose of assets to deal with urgent financial woes and consider taking out fresh loans. Asiana Airlines is considering putting the Kumho Asiana building in which the airliner has a 80 percent stake, an airliner official said.
Asiana Airlines has come up with such mid- to long-term strategies as aircraft alternation and introducing highly efficient aircraft. The airliner plans to retrofit 43 passenger aircraft to secure an additional 650 seats.
Two low-profit making B747-Combis aircraft will be converted into cargo aircraft, while the number of newly introduced next-generation aircraft will be increased to 17 by 2022 to raise fuel efficiency.
Introducing new aircraft by 2022 will help cut costs by an estimated 48 billion won.
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