South Korean retail-to-airline group Aekyung and activist fund KCGI plan to participate in preliminary bidding for a stake in Asiana Airlines on Tuesday, company officials said. Big conglomerates GS, SK and Hanwha would not participate in the bidding for the debt-ridden carrier, company spokesmen said. The 31.05% stake, worth 387.4b won ($319.5m) as of Monday’s closing price, has been put up for sale by top shareholder Kumho Industrial, which has been under pressure from creditors to reduce its debt. The sale comes as the South Korean airline industry struggles with higher fuel costs and weakening demand due to a diplomatic row between Seoul and Tokyo. Asiana Airlines and bigger rival Korean Air Lines swung to operating losses for the April-to-June quarter, from a year earlier. KCGI would form a consortium to bid for the Asiana stake, a KCGI source said without disclosing its partners. South Korean brokerage Mirae Asset Daewoo also would take part in the deal as a financial investor, a company official said without elaborating.<br/>
star
China’s top three airlines are bracing for a further margin squeeze as softer travel demand pressures passenger yields and a weakening yuan currency inflates costs, analysts said, as many of them slashed their annual profit forecasts for the carriers. The outlook revision - for which analysts also cited an economic slowdown amid a US-China trade war and fears of rising oil prices - comes after China Southern, Air China and China Eastern turned in lower net profits for the January-June period last week, erasing Q1 gains. China Southern, the country’s largest carrier by passenger numbers, posted a 20.9% year-on-year drop in profit to 1.69b yuan ($238m), while China Eastern posted a 14.9% drop to 1.94b yuan. Air China saw a smaller 9.5% drop in net profit to 3.14b yuan due to positive returns from its investment in Hong Kong’s Cathay Pacific, which swung to its first profit for the January-June period since 2016. Passenger yields fell for all three airlines, with China Southern suffering the steepest decline of 1.65% from a year earlier. “With the expectation that trade talks will continue for the rest of 2019, we expect a decline in the yield to continue, resulting in a total 2.3% drop for the full year,” Ivan Su, an equity analyst at Morningstar, said of China Southern. Cargo demand is also expected to stay soft, as a protracted trade war between the world’s two biggest economies continues to disrupt global supply chains and rattle financial markets.<br/>