[THE INVESTOR] Asiana Airlines
, the nation’s second-largest air carrier, is mulling a joint venture for in-flight catering, local news reported on June 22.
Citing sources from the airline industry, the report indicated that Asiana has been discussing the plan with various companies here and abroad.
“Asiana, which has outsourced catering, is planning on establishing a new JV,” a source was quoted as saying.
Asiana began in-flight catering business in 1994 and continued until 2003 when it sold 80 percent of the stake to LSG Sky Chefs, the world’s largest provider of airline catering under German Lufthansa, as part of restructuring efforts. Since then LSG Sky Chefs Korea has provided in-flight meals for Asiana.
Asiana Airlines. The Investor
The two parties have extended the five-year contract term twice already in 2008 and 2013. The final contract expires in 2018.
LSG Sky Chefs Korea supplies in-flight meals to both Asiana and Air Busan, a low budget airline under Asiana, and recorded operating profit of 43.6 billion won (US$37.7 million) last year. As Asiana is planning on launching its second low-cost carrier Air Seoul by the end of this year, the company is planning on expanding its in-flight catering service for maximum profitability.
Korea’s leading food makers CJ and Daesang are considered as JV candidates. CJ currently operates catering service for Asiana Group’s headquarters in Gwanghwamun, Seoul, while Daesang and Asiana have been good business partners over the past years. Daesang’s vice chairman Park Hyun-ju is the younger sister of Asiana chairman Park Sam-gu.
“We are considering different options for the future of in-flight catering services. However, there is still one year left for the contract, so the plans have not yet been finalized,” an official of the company said.
By Ahn Sung-mi (email@example.com