SEOUL, Aug. 5 (Korea Bizwire) – Asiana Airlines Inc., a major South Korean flag carrier, is expected to see its earnings improve down the road thanks to an overhaul of unprofitable routes and sales of noncore assets, analysts said Friday.
In a note to clients, Daishin Securities Co. said the airline has started turning around as it swung to a profit on an operating-income basis in the second quarter of this year.
Asiana’s operating profit came to 28.8 billion won (US$25.9 million) in the April-June period, compared with a loss of 67.1 billion won a year earlier. The company attributed the turnaround to a jump in the number of local residents going abroad and strong demand in China, Japan and Southeast Asian nations.
“Asiana is in the middle of making a breakthrough by selling nonessential assets and streamlining unprofitable overseas routes,” said Lee Ji-yoon, an analyst at Daishin Securities. “Air Seoul is preparing to serve Asiana’s nine unprofitable overseas routes.”
Asiana said it has successfully sold its noncore assets, including a 50 percent stake in Kumho Asiana Plaza Saigon, as part of debt reduction efforts.
Air Seoul, which started to fly on domestic routes, is the second airline subsidiary of Asiana, which already operates Air Busan.