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JULY 2019

Week 27

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Asiana takes second bite out of Big Apple

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July 5th 2019

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New second daily New York flight indicates Asiana restructuring is not just about cuts. Read More »

Asiana Airlines had gone quiet since its Kumho shareholder pledged to sell off its holding to a new investor who would both reinvigorate and reduce the high debt of Korea’s second-largest airline.

But the airline is making a notable change and an investment with the planned launch of a second daily Seoul Incheon-New York JFK service later this year. Both flights will be operated by the A350. There are wide strategic implications and the launch provides more management clarity about how Asiana’s future is to be improved.

Asiana had been suffering from poor performance in eastern North America. New York had been a single daily flight, but often served with an A380. Yields were diluted due to the capacity glut. In the local market, Asiana was disadvantaged by Korean Air’s double daily service. For sixth-freedom traffic, Asiana offered limited onward destinations and in some instances it only had one-way connectivity.

Cheaper New York fares impacted Asiana’s Chicago flight, which faced cost and passenger experience headwinds because the route was operated by an older 777-200ER. Passengers sought interline or self-connections to the often cheaper New York fares that had a better product. Asiana earlier this year announced it would end Chicago, amongst other decisions to improve profitability and show it was willing to take significant measures to restructure.

Asiana expects to receive its first A321neo this summer as part of a re-fleeting focused on the neo and the A350.

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