Asiana to close Saipan office

After over 30 years, Asiana Airlines, one of the largest carriers servicing the CNMI, officially announced yesterday that it would be pulling the plug on its CNMI operations by the end of this month.

In a letter addressed to the public, Asiana Airlines regional manager Intak Hwang stated that after 32 years, Asiana Airlines will no longer be serving its Incheon-Saipan route come June 30.

“After three decades of service in the CNMI, our last operation will be on June 30, 2024. Following this date, we will no longer be serving the Incheon-Saipan route. Asiana Airlines has been the front runner in providing quality air travel to Saipan residents and promoting Korean tourism in the CNMI since May 1992. We are proud of all that we have accomplished together with our island partners and would like to thank you all for your loyalty and support in the last 32 years. Please be assured that we will maintain and deliver the high standard of professionalism and service that has set Asiana Airlines apart from competitors until our final flight from Saipan. We once again appreciate your long-standing cooperation and wish you all the best moving forward,” said Hwang.

Commonwealth Ports Authority executive director Leo Tudela stated that CPA will be impacted financially by the loss of Asiana Airlines.

“I was surprised with the news myself. I received the letter earlier today. It’s saddening that Asiana is leaving, they’ve been here a long time. We had hoped they would stay past June 30, but unfortunately, they decided to terminate their flights to Saipan. Asiana leaving is going to impact CPA’s airport revenue,” he said.

In a previous board meeting, CPA chair Joe Ayuyu shared that CPA has already incurred about a $200,000 deficit (on the airport side) this fiscal year.

To remedy the possible financial loss, Tudela said CPA is working with Hong Kong Airlines to add additional flights to its current schedule.

“We are trying to arrange additional flight schedules with Hong Kong Airlines this summer. That would help temporarily and we hope they continue to fly until December. Unfortunately, we don’t tell the airlines what to do. We just hope they can consider doing this because we need more tourists coming in, not more airlines pulling out, because we are still slowly recovering from the pandemic,” he said.

When asked if the steep airport landing rates were the cause of Asiana pulling out, Tudela said it could have been a factor.

“Things happen, I don’t know the exact details of why they’ve pulled out their flight but with the rates, for the last few months, CPA has been working on a way to help airlines with the high airport fees. It could be a factor, but we’ve explained to Asiana’s management that we’re working on helping airlines with the rates. But as we speak, we continue to discuss the matter regarding the rates,” he said.

Tudela added Asiana’s merger with Korean Air could also be a factor on Asiana’s decision to completely end its service to the CNMI.

“Their merger with Korean Air could [also] have something to do with it. I heard Asiana will be merging with Korean Air, it’s looking promising, and it could happen in the near future,” he said.

In a comment from Marianas Visitors Authority managing director Chris Concepcion, he noted that the cost of doing business in the CNMI has increased significantly so that it was an important factor in Asiana’s decision to suspend flights.

“Asiana had previously announced a suspension of flights to take effect in March 2024 but they extended that to June. We understand that a majority of customers coming in on Asiana were connecting from mainland China, with a smaller number coming from Korea,” he said

Concepcion added with the possible merger of Asiana Airlines and Korean Air, MVA is proactively discussing a Seoul-Saipan route with Korean Air.

“Asiana Airlines is currently undergoing some financial challenges and we expect them to eventually be purchased outright by Korean Air later this year once all government approvals are received. When that happens, Asiana Airlines as an entity will permanently cease to exist. We are in talks with Korean Air now about taking up the Seoul-Saipan route and hopefully will have some good news in the coming months,” he said.

“We extend our gratitude to Asiana Airlines for their 32 years of service to the Marianas and look forward to working with Jeju Air, Tway, and others to fill the demand for seats from Korea and other Asian countries they fly to,” Concepcion added.

In a comment from MVA board chair Gloria Cavanagh, she said MVA is saddened by Asiana’s decision to cease operations in the CNMI as this takes away flights that feed the CNMI’s economy.

“Asiana Airlines has officially announced the suspension of regular flights from February of this year. However, thanks to the support of a local tour agent who purchased hard block seats, Asiana’s flights will continue to operate until June. Once this arrangement concludes, the flights will be suspended. We thank them for helping our Commonwealth grow as a desired destination for the Korean market. We are saddened at their decision to suspend flights. This again takes away flights that feed our economy. We hope this is not the last time we see this legacy airline. After 32 years, there are many aspects that led to this decision. The outrageous increase in airport fees is an issue. Another is that prior to COVID-19, Asiana’s load factor was heavily in the Chinese market. Of course, there are aspects within the company itself that led to this decision,” she said.

Saipan Tribune has reached out to the Office of Governor Arnold I. Palacios, the Saipan Chamber of Commerce, and the Hotel Association of the NMI for comments but they have yet to provide a statement.