Asiana Airlines Set to Confirm New Sale Deal on Friday

An Asiana A380 in Seoul (Photo: AirlineGeeks | Ben Suskind)

[ News ]December 24, 2019 7:05 pm ET

By Pete Ainsley

According to local media, Asiana Airlines, the second-largest airline in South Korea, is expected to sell on Friday.

The consortium consists of Hyundai Development Co. and Mirae Asset Daewoo Co. After weeks of negotiations, Kumho Asiana Group agreed to sell a 31 percent stake in the airline for 2.5 trillion won ($2.1 billion). The package also included Air Busan and Air Seoul, Asiana’s low-cost subsidiaries.

The beleaguered airline made a profit last year but recorded a loss of 524.14 billion won ($450 million) until September of this year. Also, Asiana has an outstanding debt of 2.7 trillion won ($2.3 billion) as of June 30, with 500 billion won ($429 million) due by the end of December.

Asiana Airlines needs to expand its income sources, it is expected to expand its cargo services due to its relationship with Hyundai. The airline is experiencing a tough month amid the tension between Japan and South Korea; the Korean aviation industry was hit by a huge drop in passenger volume between the two countries.

According to the Korean government, passenger numbers decreased by over 40 percent in November. In Cheongju, only 503 passengers went to Japan last month, a 90 percent decrease compared to the last year.

In spite of the difficult situation, Asiana Airlines launched a new service to Nha Trang, Vietnam last week, Nha Trang is the airline’s fifth destination in Vietnam.