On Dec. 12, Korea Ratings raised Asiana Airlines’ corporate credit rating by one notch from “BBB-” to “BBB0.” This marks the first credit rating increase for the airline in seven years since 2017, influenced by the inflow of paid-in capital increase funds and debt repayment. The upgrade reflects the airline’s improving financial health and stability, which has been a significant concern over the past decade.
Asiana Airlines announced on Dec.12 that it would early repay 1.04 trillion won borrowed from the Korea Development Bank and the Export-Import Bank of Korea. This move is part of a broader strategy to reduce its debt burden and improve its financial structure. The funds for this repayment have been secured through Korean Air’s participation in a paid-in capital increase, which has provided the necessary liquidity for Asiana Airlines to address its financial obligations.
The airline is not stopping there. On Dec. 27, Asiana Airlines plans to further repay 60 billion won borrowed from the Key Industry Stabilization Fund. In total, the company aims to repay 1.1 trillion won of policy funds this month. The repayment targets include 680 billion won in perpetual convertible bonds and 420 billion won in operating funds loans held by creditor banks and the Key Industry Stabilization Fund. This aggressive debt repayment strategy is expected to significantly improve Asiana Airlines’ financial structure.
With these early repayments, Asiana Airlines’ debt ratio is anticipated to decrease by more than 1,000 percentage points, from 1,847% at the end of the third quarter this year to approximately 700%. This substantial reduction in the debt ratio is a positive indicator of the airline’s improving financial health and stability.