Asiana's soaring debt causes concerns for Korean Air

Asiana Airlines' financial structure continues to deteriorate as its debts have soared due largely to foreign exchange losses as a result of the won's falling value against the dollar, according to industry officials, Tuesday. In the first half of this year, Asiana's debt soared to 13.39t won, up by 835b won ($638m) from a year earlier. The continuous rise in debt is becoming a burden on Korean Air, which aims to complete the acquisition of Asiana this year, they said. According to the Financial Supervisory Service, as of the end of the first half of this year, Asiana Airlines' consolidated debt ratio stood at 6,544%. The debt ratio, which stood at 2411% at the end of last year, rose by 4133.9 percentage points in half a year. This rise is because its total equity decreased by about 60%, from 521b won to 204.7b won, while its total debt increased by 835b won in the first half. This situation comes despite the company increasing its operating profit in the first half of this year by 283b won, turning a profit due to a sharp improvement in its cargo business performance. "Although international passenger demand is gradually increasing, there are concerns about the current resurgence of COVID-19, and the cost burden is inevitably high due to the influence of continuously high interest rates, high exchange rates and high oil prices," an industry official familiar with the matter said.<br/>