Asiana is sending its workers on unpaid leave

Asiana Airlines, put up for sale by cash-strapped parent Kumho Asiana Group, is forcing workers to take unpaid leave to cut costs, the company confirmed Wednesday.

Asiana’s human resources team sent out emails asking for applications for unpaid leave from office staff including sales officers and administrative staff who have not applied for unpaid leave since 2016.

The company said flight crews and people in charge of plane maintenance were not included. Some 2,000 to 3,000 employees are affected.

Some employees will be forced to take unpaid leave anywhere from 15 days to three years. While the company accepted applications for unpaid leave in the past, they were mostly voluntary applications.

“It is rare for the company to force its employees to take unpaid leave,” an industry source told the Korea JoongAng Daily. “It’s probably the first time since the 1997 Asian financial crisis.”

The move comes after the company announced suspensions of three unprofitable routes on April 23 to improve its cash flow. The Incheon to Khabarovsk and Incheon to Sakhalin routes will be suspended by the end of September. Incheon to Chicago will be suspended in October.

Kumho Industrial, the largest shareholder of the airlines with a 33.47 percent stake, plans to complete a sale by the end of this year. On April 25, it picked Credit Suisse to operate the sales.

The airline’s creditors led by the Korea Development Bank promised 1.6 trillion won ($1.3 billion) worth of support to solve liquidity problems of Asiana last month. That is roughly 1.1 trillion won more than the 500 billion won support the Kumho Asiana Group had originally asked for. The substantial size of the support was intended to signal that the airline is solvent to potential buyers. There are no candidates, however, openly announcing an intention to buy the troubled airline. While big name conglomerates like SK, Hanwha and CJ have been considered candidates, they deny interest.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]