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Asiana's ambitions met by neo order

South Korea’s Asiana Airlines has inked an order for 25 A321neo aircraft, which comes off the back of a profitable 2014 which saw the carrier post net profits of 62.7 billion won ($57.2m). The letter of intent signed with Airbus is worth a sizeable $2.83bn at current list prices. Asiana says it will use the 25 aircraft, which will seat 180 passengers in a two-class layout, on its regional services and select domestic routes.

This latest order follows up Asiana’s strong buying activity in recent years.

In 2014 the carrier received the first two of six A380s it has on order, bringing its fleet to 85 aircraft, and it is set to take delivery of 30 A350 widebody aircraft from 2017 to 2025.

Asiana’s 2014 results show a remarkable turnaround – in 2013 it made a loss of 114 billion won ($102m). The airline seems to be benefiting from the problems that its neighbours have experienced.

According to the carrier, its profits have risen due to the weak yen, which has created more demand for travel to Japan, China and Southeast Asia, including a 42 per cent jump in Chinese tourists in 2014.

This is great news for Asiana, but could it be that its fleet growth plans are too much too soon?

While its turnaround is significant, the company’s previous losses show how fickle such success can be.

One could argue that expensive and long-term fleet decisions should not be founded on short-term gains.

Not only will Asiana have to fund the deliveries, it will also have to ensure enough long-term traffic demand to fill them.

However, it seems investors are confident. Shares of Asiana closed 8.1 per cent on the news on Wednesday.

With the region’s carriers fluctuating in fortunes, it promises to be an interesting year ahead for commercial aviation in the Far East.

Don’t miss on www.mro-network this week: Dave Marcontell, chair of MRO Network’s Aero-Engines Americas event in Dallas this week, talks about the changing face of the engine market.

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