Air Seoul Faces Financial Struggles as Auditors Flag Risks
Air Seoul is facing serious financial challenges, with auditors raising concerns about its ability to continue operating as a going concern. In a March 31, 2025, regulatory filing, the airline disclosed accumulated debts of KRW179 billion (USD121 million) as of December 31, 2024.
Despite reporting record sales of KRW326.9 billion (USD222 million) last year, auditors cited worsening market conditions and sensitivity to factors such as exchange rates and fuel prices as key risks to the airline’s future viability.
“This situation indicates the existence of significant uncertainty that may raise substantial doubts about the company’s ability to continue as a going concern,” the report stated.
Air Seoul’s current liabilities exceed its current assets by KRW225.8 billion (USD153 million), and total liabilities surpass total assets by KRW139.8 billion (USD95 million). The airline has suffered from capital erosion since 2019 and defaulted on a loan from parent company Asiana Airlines earlier this year.
Air Seoul is a wholly owned subsidiary of Asiana Airlines, which was recently acquired by Korean Air. As part of the integration, Korean Air plans to consolidate Air Seoul and Air Busan into its own low-cost brand, Jin Air. However, Air Seoul’s deteriorating financial condition may complicate the planned merger.
The situation places further pressure on Korean Air’s strategy to streamline and restructure its budget airline portfolio amid ongoing market volatility and rising operational costs across the aviation sector.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com