May 7, 2019 / 3:39 AM / 9 months ago

UPDATE 1-S.Korea's Asiana Airlines to suspend 3 air routes to boost profitability

(Adds detail and background)

SEOUL, May 7 (Reuters) - South Korea’s Asiana Airlines said on Tuesday it planned to suspend three international air routes, starting early July, to boost profitability at a time when the cash-strapped carrier seeks a change in leadership.

The three routes include flights from South Korea to two Russian cities and an Indian city, the airline said in a statement.

Kumho Industrial Co Ltd, the top shareholder of Asiana Airlines, said last month it would sell its entire stake in debt-laden Asiana and later hired Credit Suisse to manage the stake sale.

Asiana has already sold assets to improve cash flow and reduce debt from aircraft purchases, as it battles rising fuel costs and competition from low-cost carriers.

As part of its cost-cutting efforts, South Korea’s second-biggest airline had said it would halt operations of its first-class seats starting September, but instead offer cheaper premium seats called Business Suite.

The airline’s creditors have said it would provide 1.6 trillion won ($1.37 billion) in financial support to the airline, alleviating liquidity problems.

In March, auditors raised doubts about Asiana’s financial statements, after which the airline reported steeper losses and bigger debts, triggering warnings of credit-rating downgrades. Co-Chief Executive Park Sam-koo resigned to take responsibility.

$1 = 1,168.7000 won Reporting by Heekyong Yang, Editing by Sherry Jacob-Phillips

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