Asiana Airlines is restructuring to commit to a future of growth in aircraft, network and product, but is confronting increasing financial challenges. Profits have long been weakened by a business underexposed on long haul flying and overexposed on short haul routes, which are facing Chinese and LCC competition.
Asiana's debt ratio is again growing, reaching 877% in 3Q2017. Asiana's challenges will grow as it takes delivery of more aircraft. Korean Air's debt challenges occurred as it neared the end of a major aircraft delivery cycle. In comparison, Asiana's debt problems are occurring as it is still starting a delivery cycle. Asiana has more widebody aircraft on order than Korean Air. Airbus is likely sensitive to Asiana's difficulties, given that Asiana is a strong Airbus customer, operating both the A380 and A350.
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