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Asiana Airlines completes tough 2008


Asiana Airlines finished 2008 with a fourth quarter net margin of -15.2%, taking the full year net margin to -5.3%, as falling demand and high fuel prices played havoc with the airline's earnings.

The full year operating margin of -1.2% was not as bad some of its rivals, but the fourth quarter's -8.7% operating margin is clearly not sustainable.

Asiana Airlines operating profit margin and net profit margin: 2006 to 2008

Asiana Airlines net profit margin and revenue: 1Q07 to 4Q08

Yields (denominated in local currency) have been rising strongly as a result of the sharp depreciation of the Korean won. Stronger inbound demand from China and Japan has offset big declines in other markets and weak outbound travel demand.

Asiana Airlines passenger traffic growth, yield growth (in WON), and passenger load factor growth: Jan-08 to Dec-08

Cargo yields (in won) have also come off their mid-year highs - and are under significant pressure in US currency, as shipments plummet.

Asiana Airlines cargo traffic growth, yield growth (in won), and cargo load factor growth: Jan-08 to Dec-08

The destruction of cargo demand has been worrying in the final quarter of the year.

Asiana Airlines passenger numbers growth and cargo volume growth: Jan-08 to Dec-08

This has led to cargo revenue growth dipping into negative territory in the final month of the year.

Asiana Airlines passenger numbers revenue growth and cargo revenue growth: Jan-08 to Dec-08

Trimming fleet as pressures mount

The airline has not disclosed its profit outlook for 2009, but Asiana will end the year with one fewer aircraft. Two B737-700s, one A321 and one B747-400F will exit the fleet during the year, while one A320 and two A300-300s will be added. Lower fuel prices will help Asiana in 2009, but the overall outlook remains very challenging.

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