Asiana cuts routes and First Class


South Korea’s ‘second airline’ Asiana, has been under pressure to cut costs and adjust to new realities as its biggest shareholder Kumho Industries announced it was selling all of its share holding.

The airline has been under pressure form rising costs, especially fuel, and sharp competition from los cost carriers.

Some of the routes that have been killed off are relatively minor, two were to minor Russian destinations, but loosing the Delhi route seemed a little surprising.

The first class offer is to be ended by October and turned over to a cheaper “Business Premium” offering.

The airline is in deep debt with little chance of returning any profits to its shareholders – hence Kumho Industries  determination to sell up. However the airlines banks have agreed to support the airline with a US$1.37 billion credit line. This should ensure it can carry on modernising its fleet and at least partially restructure to cut costs.