Asiana Airlines, South Korea's second largest airline, is set to launch a long-delayed interest-rate hedging program this year now that improved ticket sales suggest that finding counterparties will prove easier. C.S. Han, general manager, finance department in Seoul, said Asiana had planned for some time to reenter the interest-rate swap market to hedge 45% of its USD1.4 billion foreign currency floating-rate loan portfolio, but found attracting counterparties difficult because of its double-B long-term rating (DW, 7/17). At the end of November though it re-entered the market for the first time since the Asian financial crisis, paying fixed in a USD200 million (notional) swap.
Asiana has recently established a credit line with a large foreign bank, meaning that entering into future interest-rate swaps should prove easier, Han said. Asiana's sales also increased by 20% last year, meaning that the airline is more optimistic that the future will bring a credit rating upgrade and better funding opportunities, he noted.
Separately, Asiana also started using an online ticket trading system run by Excambria and is considering using a listed derivatives service that Excambria intends to launch (DW, 12/17).
