Asiana owes financial institutions 3.2 trillion won (US$2.7 billion) in short-term obligations, with some 1.2 trillion won of loans maturing this year. (Yonhap)
SEOUL, May 7 (Korea Bizwire) — Asiana Airlines Inc., South Korea’s second-biggest carrier, said Tuesday it will streamline its international routes and stop operating first-class cabins in September to cut costs ahead of its planned sales.
Asiana said it will suspend operations of the nonprofitable routes from Incheon to Khabarovsk and Sakhalin in Russia and Delhi in India starting July 8, earlier than its originally scheduled September, Asiana said in a statement.
Also, business suite cabins will replace the outgoing first-class cabins at prices 30 percent to 40 percent lower than the fares set for the top-class seats on Sept. 1, it added.
Airlines traditionally have three travel classes — first, business and economy. The first-class seats have been available only on the long-haul routes to Los Angeles, New York, Frankfurt and three other destinations, a company spokesman said.
The company plans to strengthen its fleet in the coming years to ensure safe flights. It will add 19 A350s and 15 A321neos to its fleet by 2023. It currently has 85 planes that include six A380 superjumbo jets.
The route overhaul and the removal of first-class cabins come as the airline has been put up for sale due to a heap of debts.
Asiana owes financial institutions 3.2 trillion won (US$2.7 billion) in short-term obligations, with some 1.2 trillion won of loans maturing this year.
Last year, it swung to a net loss of 10.4 billion won from a net profit of 248 billion won a year earlier due to currency-related losses and increased jet fuel costs.
Creditors announced last month they will inject 1.6 trillion won into the debt-ridden airline to help it overcome a liquidity crisis.
Meanwhile, Asiana’s bigger rival, Korean Air Lines Co., said early this month it will not operate first-class cabins on 27 additional routes starting in June due to low demand for the highest class seats.
Korean Air has provided three travel classes on 62 of its 111 international routes, while operating business and economy class cabins on 49 routes.
Following the readjustment, business and economy classes will be available on 76 international routes, and three travel classes will be operated on 35 routes.
(Yonhap)
