Asiana reports $72 million Q2 loss

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Asiana reports $72 million Q2 loss

Asiana Airlines, trying to recover from a fatal crash in San Francisco a month ago, posted a net loss of 80.1 billion won ($72 million) in the second quarter due to sluggish passenger demand and shrinking cargo business.

The nation’s second-largest airline reported the loss in a regulatory filing yesterday. In the second quarter of 2012, Asiana lost 47.3 billion.

Sales decreased 4.1 percent year-on-year to 1.37 trillion won in the second quarter. It also had an operating loss of 29.9 billion won, a huge drop from the 38.9 billion won in operating profit it reported last year.

The company said its passenger business slowed in the April-June period because tensions with North Korea discouraged Japanese tourists, while fewer Koreans traveled to China due to the outbreak of bird flu.

Asiana also said its cargo business was affected by a slowdown in the global economy, especially the automobile and display industries.

The affiliate of Kumho Asiana Group posted an operating loss for the third straight quarter, after losses of 21.1 billion won in the first quarter and 15.6 billion won in the fourth quarter of 2012.

Industry observers predicted that Asiana difficulties will continue in the third quarter, traditionally a peak season for airlines. Shares of the company slid 1.49 percent to 4,620 won in trading yesterday.

Asiana said it will try to enhance its business by introducing Airbus A330 planes and one A321, while reorganizing unprofitable routes.

Since the fatal crash in San Francisco last month, the company has been putting most of its efforts into dealing with injured passengers and families. While the passenger-care phase is almost over, the company must finalize a compensation plan and prepare for lawsuits.

“Since the results of the NTSB investigation haven’t come out, it is difficult for us to say how much we will compensate passengers at this moment,” said an Asiana official. “Our legal team and accounting team are on full alert.”

Meanwhile, Asiana said officials from the National Transport Safety Board finished their investigation at the company’s headquarters in Osoe-dong, western Seoul and left for the U.S. on Wednesday. The NTSB investigators came to Korea on July 29 to look into company’s safety system.

BY joo kyung-don []
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