Share trading halted [Asiana financial troubles]
 

According to Reuters,
Kind of curious if this means anything or if it is just some oversight.

Given that the local accounting firms are usually very, very cozy with the chaebols here, it means that the constant dumpster fire that is Asiana's finances has turned out to be something even worse.

PWC are the auditors. Asian Fails to Get Accounting Sign-Off. Article quotes Moody's:

Hmmm wonder if I should credit to Turkish instead of chasing lifetime gold with Asiana

I imagine this has more to do with embezzling or misappropriation of funds from OZ to other Kumho Group ventures than an indication that Asiana suspending operations is imminent. Far more likely to suspend operations IMO is WOW Air.

Considering OZ is generating a good US$650 million in cash a year from operating activities, I highly doubt they're anywhere near going under. That is, if they stop messing about in businesses they have no business being in and of course, assuming their financials are accurate.

https://www.reuters.com/article/asia...-idUSL3N21D01H

Asiana Airlines Fettered by Excessive Aircraft Leasing Costs - ??????? - BusinessKorea

This is sad, I think OZ has done a wealth of good for people who don't want to fly KE for personal reasons.
With revised numbers hiking the debt to equity ratio, and rating agencies potentially downgrading to non-investment grades, it would create an impossible situation for OZ.

Why lease that many planes though?

Some of those figures in that latter article simply do not make sense.

As such, leasing a high % of your a/c is not a problem (look at IndiGo, VietJet Air and so on). BTW, I assume we are talking about operating leases. Gives an airline a lot of flexibility, no need to arrange debt, possibly quicker access to growth capacity, reduces residual value risk etc. etc. Airlines can also make nice upfront profits from sale-and-leasebacks. Plus there is plenty of competition in the leasing market, so airlines can actually get some really attractive deals.

Very few airlines globally are investment grade. I'm not sure whether local ratings (e.g. KIS) are 100% comparable to S&P, Fitch, Moody's.

The Korean airline industry is very unique.

KIS is Moody's. Not sure about the other one.

The point being local ratings are not necessarily comparable to the ratings of big 3.

I recall KE and OZ had local ratings (KIS, KR, NICE) of A- / BBB+ (in that ballpark) a few years ago. By conventional credit metrics, can't imagine the big 3 would have rated them anywhere close.

What are the comments of the Korean media ? How serious is risk of collapse ?
Do you think it's time to start crediting miles to other FFP ?

KIS is MIS in Korea and they rate the Korean counterparties for Moody's so their rating is Moody's rating.

Well I think it's tough but they will find a way out. It looks like the CEO resigned to protect the group? And apparently they asked for help with liquidity to the KDB.
If Asiana goes down, the mother group Kumho will probably go down as well, hence the decision of the CEO.

Asiana definitely falls under the definition of TBTF in Korea, I expect that the Industrial Bank of Korea will step in if .... does indeed hit the fan. If Asiana fails, then the entire Gumho group fails and that would be political suicide for the current government.

I do not believe the rating scale to be the same (could be wrong, but remember looking into this some years ago). BTW, tried to find the rating on Moody's and could not. How do they list it?