[Courtesy of Kumho Asiana Group]
South Korea's second largest carrier Asiana Airlines has sold its stake in a Vietnamese building for some 107.5 million US dollars that would be used to improve the company's financial health, Asiana officials said Thursday.
The deal came after Asiana saw its worst-ever year in 2015, hit by a sharp fall in air travel and tough competition with budget carriers. It reported a net loss of 81.5 billion won ($70.2 million) last year, a turnaround from a profit of 63 billion won a year ago.
Its balance sheet improved this year thanks to low oil prices, improved passenger flight rates, and rising air traffic, but analysts painted a gloomy long-term outlook for Asiana despite its continued efforts to reduce cost and debt.
In April, Asiana's board approved a plan to raise cash reserves and reduce debt through the sale of non-core assets including a 100 percent stake in Kumho Terminal and a 50-percent stake in Kumho Asiana Plaza Saigon, a hotel and office operator in Vietnam.
Asiana said the Vietnam deal generated a profit of 50.9 billion won. "To improve our financial structure, we will push for the normalization of our business by combining overseas branches or through outsourcing," an Asiana official said.
Asiana's share in domestic lines fell to 18.8 percent last year. Asiana plans to launch a second budget carrier in addition to Air Busan, but commercial service may not be possible within the first half due to delayed endorsement from aviation authorities.
Separately, Kumho Industrial, the co-owner of the building in Vietnam, also sold its 50 percent stake in Kumho Asiana Plaza Saigon at the same price. Kumho Industrial has been implicated in a family dispute between two sons of the Kumho Group founder.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
