Asiana Airlines accepting voluntary retirements, unpaid leave

Asiana Airlines headquarters in western Seoul. Korea Times file

By Kim Hyun-bin

Asiana Airlines is receiving applications for voluntary retirement and unpaid leave from its employees, as the airline focuses on cutting costs.

The measures come two weeks after Kumho Asiana Group, the parent group of the country's second largest carrier, decided to sell the debt-ridden airline to avert a liquidity crisis. This could also be the start of large-scale restructuring at the company.

According to Asiana officials, Wednesday, the airline has begun accepting voluntary resignations from senior employees.

“On Tuesday night, Asiana announced it would receive applications for voluntary retirement from employees with over 15 years at the company. Workers eligible include office employees and those in the sales and airport service departments,” an official said.

In addition, the airline is encouraging employees to go on unpaid leave to help the company save costs. The leave targets office workers mainly, excluding personnel related directly to safety and aircraft operations, such as pilots, flight attendants and mechanics.

Employees can take leave of between 15 days to three years.

“We are expanding the application scope for unpaid leave, which we have already been carrying out in line with efforts to cut costs,” the official said.

The voluntary retirement and unpaid leave are part of measures announced by company CEO Han Chang-soo to regain market confidence and garner support from creditors. In early April he pledged to sell assets to secure liquidity, reduce flights on unprofitable routes, reduce the fleet size and realign business organizations.

Toward that end, the airline conducted minor restructuring recently by integrating teams for greater efficiency ― from 224 teams in 38 divisions to 221.

Last week, the airline also announced it would halt operations to three unprofitable destinations ― Khabarovsk and Sakhalin in Russia by September, and Chicago by late October.

Sakhalin had the lowest seat occupancy rate of 56.8 percent followed by Khabarovsk with 63.9 percent, compared to Asiana's 84.8 percent overall average occupancy.

Since late 2015, the carrier, hit with a financial crisis, has suspended other unprofitable routes ― it reassigned routes to Hiroshima, Takamatsu and Shizuoka to its budget unit, Air Seoul, and halted flights to Vladivostok, Bali and Yangon.

Some aviation experts also predict Asiana may reduce the use of large planes such as the A380, which will reduce the number of flight personnel needed.

In mid-April, Kumho Group decided to surrender its 33.47 percent stake in Asiana in exchange for a creditors' rescue package worth 1.6 trillion won. Asiana's sales account for nearly 60 percent of Kumho Group's total.

SK, Hanwha, CJ and some other conglomerates have been mentioned as potential buyers for the carrier. Market watchers say the airline may be valued at between 1.5 trillion won and 2 trillion won.