Asiana Tries how to get rid of little ants in house to Shrink Its Way Out of Trouble Cranky Flier

It has been — to be understated — a very bad year for asiana, the second largest airline in south korea. Years of increasing debt loads have finally caught up with how to get rid of little ants in house the airline, and it is now trying to shrink its way back how to get rid of little ants in house to a comfortable place. This is very much a work in progress, but you can expect a fair amount of upheaval as how to get rid of little ants in house things move forward.

Asiana started flying only in 1988, breaking up korean air’s monopoly as the hometown airline. By 1991 it was flying to the US (los angeles), and it grew quickly from there. Today it is a member of star alliance with 80+ airplanes flying around the globe. That may sound like a success story, but that would gloss over how the airline actually got how to get rid of little ants in house to this point.

Like most large south korean businesses, asiana is part of a chaebol, a local word for a mega-conglomerate. What today is known as kumho asiana group owns stakes how to get rid of little ants in house in companies in all kinds of industries. Kumho asiana spent a lot of money and raised a how to get rid of little ants in house lot of debt to grow into a variety of industries.

But in the last decade, kumho asiana has had to shed some of its investments how to get rid of little ants in house to try to pay down those crushing debts. Kumho tire was sold off in 2017, and now asiana itself may face the same fate. This isn’t a story about the parent company, however. Asiana airlines has its own problems.

Asiana’s auditor samil pwc had previously said it could not how to get rid of little ants in house complete its audit because it had not been provided with how to get rid of little ants in house enough information to evaluate the airline’s provisional debt related to maintenance of leased aircraft, as well as the fair value of stakes in affiliates how to get rid of little ants in house bought in 2018.

To get that audit completed, asiana had to restate earnings, and it was a substantial hit. Operating profit plunged from 88.7 billion won to a mere 28.2 billion won (about US$24 million). And that led to a net loss nearly doubling from how to get rid of little ants in house 105 billion to 196 billion won (about US$170 million).

That massive change sent shockwaves through the airline. With the restated financials, south korean credit agencies warned they might downgrade the airline’s debt to junk status. If that were to happen, it would trigger provisions that would require asiana to repay how to get rid of little ants in house more than the 1 trillion won in debt it already how to get rid of little ants in house has to repay this year. And that could be catastrophic for the financial future of how to get rid of little ants in house the company.

By the end of april, a bailout had been secured. Creditors would provide a staggering 1.6 trillion won (more than US$1 billion). Meanwhile, kumho industrial, which owns about a third of the airline, said it would sell its stake. This would result in improved liquidity and yes, financial stability. But still, asiana wasn’t going to be able to just keep operating as how to get rid of little ants in house it was. Cuts were coming.

That last change may show the weakness of asiana’s strategic position in the US market. While korean air has become delta’s joint venture partner, and incheon has become their primary connecting point between the how to get rid of little ants in house US and asia, asiana has a much weaker position with fellow star carrier how to get rid of little ants in house united. United and ANA have the joint venture that sends traffic how to get rid of little ants in house through tokyo. Asiana is just a minor partner for united, at best. Apparently it’s so minor that united’s hometown chicago hub can’t help sustain asiana’s service there.

In addition, it had 25 a321neos, 13 A350-900s, and 9 A350-1000s on order. That’s a lot of metal coming in to an airline how to get rid of little ants in house that’s already bloated with debt. But instead of shedding orders, it looks like asiana will be ditching older aircraft. In particular, it is eyeing the 767 and 747 fleet for cuts.

Many had speculated the small A380 fleet would also disappear. Those six airplanes currently fly one daily flight from incheon how to get rid of little ants in house to bangkok, frankfurt, hong kong, los angeles, new york/JFK, and tokyo/narita. After modifying other aircraft, the A380 remains the only airplane with first class onboard… until september.

Except for what would ultimately be the elimination of the how to get rid of little ants in house airline’s dedicated freighters, these changes all seem relatively minor so far. Even if the 747s and 767s go away, the orders will still give asiana net growth. It may have new capital and owners by the end how to get rid of little ants in house of the year, but that alone won’t turn the airline’s fortunes around. Bigger changes are needed.

Buying / leasing the A380 would seem to be an expensive undertaking how to get rid of little ants in house for any airline, and a small, relatively new (just over age 30), not-as-established airline would likely have trouble making enough money to how to get rid of little ants in house justify the expense. For a well established airline like BA or lufthansa, it should be easier to fill that size of plane how to get rid of little ants in house – loyal, dedicated clientele, particularly with the business crowd, established home market & primary base(s), frequent flier plan, good partner network, etc. Would not be surprised if this was not a primary how to get rid of little ants in house cause of the financial problems.

Another one that I can see from your metal chart how to get rid of little ants in house is just the # of types in the fleet. Why on earth would an airline of this size and how to get rid of little ants in house scope need 6 different wide body types?? If there is anything that the low-cost model should be teaching legacy and larger airlines, it is that you can derive significant efficiencies, i.E. Cost savings, by simplifying your organization, and in this case, your fleet. “optimize” as dr. Deming would say. (the developer of the toyota production system, which has application across pretty much every industry in our how to get rid of little ants in house global economy)

There is a story to tell here. The airline started with 747s for long-haul but eventually it moved most of those to cargo. The later deliveries were cargo airplanes, and others were converted. Sure, they keep two around for passenger flying now, but that’s not hard to do when you already have the how to get rid of little ants in house pilots and maintenance to support cargo. Without cargo, I imagine these airplanes would be gone now. At the same time, it then needed a smaller widebody for more regional routes, and that’s where the 767 came in. That airplane has served well but the time to retire how to get rid of little ants in house has come. When these flights are gone, you already have a third fewer fleets.

The next wave of fleet renewal was with the 777 how to get rid of little ants in house for lower capacity long-haul and the A330 for higher capacity medium-haul. The 777 makes sense, but the A330 makes less sense unless you were also how to get rid of little ants in house going to retire the 767s. Maybe they just had more growth opportunity and decided it how to get rid of little ants in house wasn’t worth doing at the time.

Then there’s the A350 which is the current strategy. Get rid of the 747/767 fleets and ride out the 777s until those hit how to get rid of little ants in house the end of their leases/useful lives. Kill the a380s when you can. Then you have a330s for regional and a350s for long how to get rid of little ants in house haul. It just has taken the airline a long time to how to get rid of little ants in house get there.

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