[Photo by Kim Jae-hoon]
The management at South Korea’s full-service carrier Asiana Airlines Inc. offered to fully resign before enforcing sweeping cost-saving measures as the country’s air business faces its worst year, with the air traffic coming to a standstill amid ravaging spread of a new communicable coronavirus.
Chief Executive Han Chang-soo in his letter to the employees said the company will immediately enter an emergency mode to save cost and improve profitability amid ballooning losses on plunging travel demand from China, the epicenter of the new coronavirus (COVID-19) outbreak. Chinese tourists have accounted the largest share of foreign visitors to Korea.
Asiana Airlines last year delivered an operating loss of 368.27 billion won ($392.6 million), stretching more than 10-fold from the previous year on multiple scourges - Korean consumers’ voluntary restraint in traveling to Japan amid diplomatic rows between Seoul and Tokyo, intensifying competition due to mushrooming budget carriers and unfavorable currency conditions.
All executives will resign from the management level and return 30 percent of their annual salary (40% for CEO) to the company in show of commitment to the streamlining goal. Division heads also will forgo 20 percent of their salary.
Employees will go on unpaid leave for 10 days to minimize the number of workers idling from the roll-back of 79 percent routes to China, and 25 percent to Southeast Asia, according to the company. Asiana Airlines already started offering voluntary leave to its cabin crews on domestic routes on Feb. 12.
Various corporate events also will be reduced in size or cancelled for a while, and all the measures will be in place until the business returns normal.
Meanwhile, Asiana Airlines on the same day denied favoritism rumors behind the hiring of two sons of CEO Han. It claimed the second son was hired before Han took the office and the first son also was not questioned about his family during the interview.
By Choi Keun-do and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]