By Choi Sung-jin
Asiana Airlines, one of the two national flag carriers, is to conduct across-the-board self-restructuring to improve its performances.
At a meeting attended by about 140 executives last week, Korea’s No. 2 carrier unveiled plans to reduce payrolls, business lines and streamline organization, the company said on Sunday.
Asiana will trim its staff through voluntary retirement and sabbatical leaves of absence, and also reduce the number of mid-level managers by merging some of the 36 branches. The carrier will also trim its organization by outsourcing domestic airport services, such as booking and ticketing.
The company will also close unprofitable routes, suspending services to Vladivostok, Bali and Yangon among others, starting next spring. Also among the harsh restructuring plans are drastic cost-cutting plans through wage cuts for executives and withdrawal of company-funded vehicles.
Asiana’s operating profit in the third quarter stood at 31.2 billion won ($26.6 million), down 36.8 percent from a year ago. Sales in the July-September period dropped 8.2 percent to 1.45 trillion won. The operating profit ratio was the lowest among the three major airlines, which also include Korean Air and lost-cost carrier Jeju Air.
Asiana, which has focused on short and medium-distance routes to China and Japan, was hit hardest by the industry’s slump caused by the Middle East Respiratory Syndrome, and faces stiff challenges from budget airlines on shorter routes.