Asiana’s Saipan-Korea flights post $10M loss in FY’08

Asiana Airlines posted a loss of $10 million on its Saipan-Korea flights in Fiscal Year 2008—a staggering 100-percent jump over the carrier’s previous loss of some $5 million.

Saipan general manager Kwang Joong Kim admitted that Asiana Airlines is “bleeding deeply” because of the impact of the global economic crisis and the struggling won.

Kim said Asiana incurred about $5 million losses in FY2007. Some years before that, the official said that “millions” of losses were already recorded.

“We’re not making a profit here [in the CNMI]. We already lost millions of dollars. We sacrificed a lot. However, we have the commitment to fulfill and we’re intending to continue it,” Kim said.

Beginning March 29, Asiana will suspend its four daytime flights between Seoul and Saipan until June 30.

But, Kim said, there’s no reason for the CNMI government and its people to worry because the decision was made after considering that the three-month period—April, May, and June—is the lowest season for Korean travelers.

He said the peak season for Korean travelers starts in July.

“It’s never our intent to stop it. The schedule is temporary because it’s the lowest season of demands from Seoul. Come July, we will reintroduce the same service,” he said.

Kim conceded the low value of the Korean won was also a factor in the decision. From the previous months’ exchange rate of 900 won to a dollar, the South Korean currency dropped to almost 1,500 to a dollar.

“It’s too high for some Korean travelers,” Kim said.

He said that Kumho Group, the parent company of Asiana, has already made a huge investment in the CNMI—the Laolao Golf Resort being the latest—which he described as clear indication that the company will remain on the island.

Asiana started doing business on Saipan in 1992.

At present, the company has 16 regular daily flights to the CNMI—11 from Incheon, two from Busan, and three from Osaka. Asiana is the only international airline serving the Saipan-Korea route.

Kim considers Incheon their biggest market and that flights from the city may increase once demand grows in the future.

Kim also cited the “full support” being extended by the CNMI government to the airline.

This month, Asiana began using a smaller aircraft, reducing its capacity by 73 passengers per trip.

Arrivals from South Korea slipped for the fourth straight month in February to 8,305, down by more than 3,000 tourists compared to the same month last year.