Asiana Airlines reported it returned to a net profit in the three months ended Dec-2012 with a profit of KRW21,600 million (USD19.8 million), compared to a net loss of KRW66,400 million (USD60.9 million) in 4Q2011, citing favourable exchange rates for the turnaround, as reported by Maeil Business and Yonhap. 4Q2012 sales reached KRW1475 billion (USD1353 million) and operating loss of KRW15,600 million (USD14.3 million). During the quarter, cargo load factor increased 1.7 ppt to 79.1%. For the full year 2012, Asiana reported a 5% increase in sales to a record KRW5880 billion (USD5219 million) while operating profit was halved to KRW179,400 million (USD159.2 million) as operating costs increased 10.4%. Full year net profit reached KRW62,500 million (USD55.5 million) compared to a loss of KRW29,900 million (USD26.5 million) in 2011. Meanwhile, Kumho Asiana Group reported KRW1470 billion (USD1305 million) in sales and an operating loss of KRW15,600 million (USD13.8 million) in 2012. Looking ahead in 2013, the carrier is targeting sales of KRW6300 billion (USD5727 million) and operating profit of KRW360,000 million (USD327 million).
Asiana reports operating loss in 4Q2012; targets USD327m in 2013
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Korea's LCC sector ended 2016 with 103 aircraft – the first time the collective fleet had crossed the 100 mark for what, until recently, was Northeast Asia's most dynamic market. Korea has six LCCs, with Jeju Air regaining a strong lead as the largest LCC. Half of Korea's LCC fleet has been added in the last three years. It is Northeast Asia's largest LCC market after China and, surprisingly, well ahead of Japan.
But overall Northeast Asia's LCC sector is pale in comparison to Southeast Asia, whose LCCs operate 74% more aircraft. Lion Air alone has more aircraft than all of Korea, while the AirAsia Group has more than all of China. Only three of East Asia's ten largest LCCs are in Northeast Asia.
And it is unclear how much further Korea's LCCs can grow in the short term. They have mostly flown domestically, and slots are now constrained. International opportunities are also challenging, and further complicated by the Jan-2017 decision of China to reject charter applications during the popular – and very profitable – Chinese New Year. Korea's LCCs needed liberalisation, not antagonism.
Alitalia: "everyone has to pull in the same direction" – ongoing issues, and viability is at stake.
After Alitalia’s board approved the second phase of its business plan on 22-Dec-2016, CEO Cramer Ball stressed the importance of achieving the support of its workforce. He said, “Everyone has to pull in the same direction to make Alitalia a viable, sustainable success story and help the airline achieve its ambition of long-term growth and profitability”. Alitalia suffered strike action from some flight crew in 2016.
Full details of the plan, which has received the support of Italy's government, have not yet been made public. Alitalia's network strategy includes further long haul growth and a reworking of its short haul operation, with an emphasis on feeding long haul via Rome and Milan. Other elements of the plan include cost-cutting, reduced headcount and possible changes to joint venture agreements. Details are to be presented to Alitalia’s workforce in Jan-2017.
Also on 22-Dec-2016, Alitalia's shareholders approved short-term funding and gave management 60 days to begin negotiations with key stakeholders - lessors, suppliers and distribution companies, in addition to trade unions. Alitalia needs their support for deep cost reduction measures, in order to win the long-term financing needed to secure the airline's future.