- Asiana Airlines and Korean Air buffeted by sharp contraction in Korean economy.
South Korea's airlines are struggling amid a sharp downturn in the local economy. Korea's GDP contracted 5.6% in the last quarter, the biggest fall since the Asian financial crisis, as exports and consumer spending slumped. Consumer confidence fell to a ten-year low in Dec-08, but rose marginally in Jan-09, helped by a recent official interest rate fall to a record low 2.5% this month.
Bank of Korea Governor, Lee Seong Tae, stated the export-dependent economy faces another difficult year in 2009. This is keeping the pressure on Asiana Airlines (whose shares fell 6.9% yesterday) and Korean Air (-2.4%). Executives at both carriers have agreed to a 10% salary reduction to help the airlines weather the economic storm.
Asia Pacific selected airlines daily share price movements (% change): 27-Jan-09
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