Asiana Airlines’ Crash Unlikely to Scare Away Customers
(NEW YORK) -- Before Saturday's crash landing at San Francisco International Airport and the death of two passengers from China, Asiana Airlines was known mostly to travelers who fly to South Korea to see family or conduct business, but the appeal of the airline was growing, especially among foreign fliers.
Just four months ago, Asiana Airlines was flying high, celebrating its 25th anniversary and its 10th anniversary of joining the Star Alliance, the largest airline code-share alliance in the world, which allows passengers to accumulate airline miles. Last year, Business Traveler magazine called Asiana Airlines "Best Overall Airline in the World." Consulting service Skytrax, based in the United Kingdom, awarded Asiana "Airline of the Year" in 2010.
Asiana Airlines Inc., South Korea's second-largest airline after Korean Airlines, was established in Feb. 1988. As of Dec. 2012, the airline's fleet included 79 aircraft. The company's destinations include 23 countries.
Within hours of the crash, the airline's president and CEO Young-Doo Yoon, 61, and other executives held a news conference in Seoul during which they apologized to the passengers, their families and the South Korean people, bowing in front of cameras.
The airline's shares closed down 5.7 percent in Seoul in trading on Monday. Analysts told The Wall Street Journal that the crash could hurt the airline in China, its second-largest market.
But for U.S. travelers used to the bare-bones treatment of domestic carriers, flying amenities and the appeal of a "foreign" carrier are likely to trump any future safety concerns when it comes to picking an airline carrier, say industry experts.
Asiana Airlines did not immediately respond to a request for comment.
"To the extent that U.S. travelers have foreign airline brand recognition, the perception would be of higher ticket prices and a more luxurious experience than domestic based carriers and not safety concerns," said Rick Seaney, CEO of FareCompare, calling to mind other non-U.S. based carriers like Singapore Airlines and Emirates Airline. Asiana Airlines offers amenities like in-flight Korean cuisine and on-board souvenirs for passengers.
Seaney said that outside a potential pattern of safety issues, he doesn't see this high-end perception of foreign carriers changing.
"Most Americans are introduced to foreign carriers -- since they are not allowed to fly domestically -- via virtual mergers, alliances and code share agreements affiliated with a U.S.-based carrier," Seaney said. "Passengers assume the U.S airline has vetted and takes responsibility for their partners."
The Convention on International Civil Aviation and other laws disallow a foreign entity from controlling majority ownership of a U.S. based airline.
Passengers who have flown Asiana from Seoul to San Francisco often connect onto planes flown by United Airlines. Facebook chief operating officer Sheryl Sandberg had earlier switched to a United flight from the plane that crashed at San Francisco.
Neal Dihora, equity analyst with Morningstar who does not follow Asiana Airlines, said that as unfortunate as they are, accidents are infrequent and will likely not hold back customers from flying on Asiana or other airlines.
"Generally, they do not have long lasting impacts because air travel is quite safe compared to other modes of transportation," Dihora said. "If the industry uses the accident to improve future safety, I would think it would be a positive where passengers feel safer because they realize that manufacturers and operators are doing all they can to improve the safety of air transportation."
Only one in 1.2 million flights have an accident, according to the National Transportation Safety Board. From 1983 to 2000, the survival rate in U.S. plane crashes was 95 percent, according to the NTSB.
George Hobica, president and founder of AirFareWatchdog.com, agrees, saying any impact after an airline incident is "short-lived" and, "crashes are soon forgotten and they have no long term impact on consumers' choice."
Korean airline incidents in the 1990s caught the attention of the Federal Aviation Administration.
Asiana Airline's first major incident was in 1993 when Flight 733 crashed in poor weather in Mokpo airport in South Korea, killing 68 people, including two crew members. Four years later, a Korean Airlines flight crashed while landing on Guam Island during a rainstorm, killing 228 people. Another Asiana plane hit the tail of a parked jet at Anchorage International Airport. In 1999, a Korean air jet skidded off the runway while landing in Pohang, South Korea.
After these incidents, in 2001 the Federal Aviation Administration downgraded South Korea's safety system's ratings, saying the country's aviation authority did not comply with the International Civil Aviation Organization's standards. After changes were made, the restrictions were lifted in December of that year.
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