Asiana CEO promises to improve trust, liquidityAsiana Airlines CEO Han Chang-soo vowed to sell more assets and reform the company to win back market trust and increase liquidity in an internal statement sent to employees Monday.
The letter comes after Park Sam-koo, who headed Kumho Asiana Group and the group’s key affiliates including the airline, announced he would step down from his post last week to take responsibility for a recent accounting blunder.
The accounting fiasco exposed the liquidity crisis the country’s second-largest full-service carrier is facing and put the airline at risk of having its credit rating downgraded.
Han said that while market concerns regarding the airline are slowly dissipating, scarce liquidity is a reality the airline is facing and the company needs to “fight through the situation with determination to build a sustainable profit model.”
The CEO vowed to sell additional assets to secure liquidity and persuade financial authorities to give more support to the company. Its creditor banks, including the Korea Development Bank, had requested the airline and the group come up with a suitable restructuring plan for support over the weekend.
Han also promised to cut services on unprofitable routes and even downsize its fleet to maximize profitability on all airline operations. He, however, did not mention which routes the company intends to suspend. Asiana currently has 87 routes in service.
The airline is also preparing to reform its organization to respond more quickly to market demands. Han said the company has already formed teams to come up with ideas to make its organization and operations more efficient.
The accounting scandal broke after auditor Samil PricewaterhouseCoopers declined to sign off the airline’s 2018 financial report citing a lack of information to assess the value of the carrier last month. The decision even caused the Korea Exchange to halt trading of the airline’s shares in the local stock market between March 22 and 25.
The auditor did eventually sign off the report on March 26, but the airline had to make amends to its balance sheet. According to the updated report, the airline posted a net loss of 195.9 billion won ($172.3 million). The previous report had reported a net loss of 105 billion won.
BY KIM JEE-HEE [email@example.com]