The decline in the value of the won against the dollar has primarily been driven by economic uncertainty created by America's tariff- raising binge after Donald Trump became president, and a desire on the part of investors to put their money in safer assets that are less vulnerable to disruption from American-imposed tariffs and trade conflict. Those safe assets have included U.S. Treasury bills. So, investors have taken their money out of other currencies, including Korean won, and put them in U.S. dollar assets. This increases demand for dollars and reduces demand for won-hence, the depreciation in the value of the won against the dollar over the last two years. Page 321 Looking forward, economic uncertainties seem to be increasing due to the spread of coronavirus in 2020 and 2021 and the global pandemic of COVID-19 infections. Economic experts say that the spread of COVID-19 has seriously disrupted global supply chains and dealt a blow to business earnings, hurting countries such as South Korea that depend significantly upon international trade to drive their economies. Thus, it seems possible that the won will decline further against the U.S. dollar, which will cause all sorts of financial pain for both Asiana and Korean Airlines. Case Discussion Questions 1. Why did both Korean Airlines and Asiana Airlines report foreign exchange losses in 2019 and 2020? 2. What could Korean Airlines and Asiana Airlines have done to limit their foreign exchange losses? Why do you think they did not take these steps? 3. Why did the Korean won decline in value against the American dollar in 2020? Could this decline have been anticipated? 4. During 2020, the U.S. dollar fell in value from $1 = 1,200 won in February 2020 to $1 = 1,088 won in December 2020. How do you think this impacted the financial performance of Korean Airlines and Asiana Airlines? EX BETA The decline in the value of the won against the dollar has primarily been driven by economic uncertainty created by America's tariff- raising binge after Donald Trump became president, and a desire on the part of investors to put their money in safer assets that are less vulnerable to disruption from American-imposed tariffs and trade conflict. Those safe assets have included U.S. Treasury bills. So, investors have taken their money out of other currencies, including Korean won, and put them in U.S. dollar assets. This increases demand for dollars and reduces demand for won-hence, the depreciation in the value of the won against the dollar over the last two years. Page 321 Looking forward, economic uncertainties seem to be increasing due to the spread of coronavirus in 2020 and 2021 and the global pandemic of COVID-19 infections. Economic experts say that the spread of COVID-19 has seriously disrupted global supply chains and dealt a blow to business earnings, hurting countries such as South Korea that depend significantly upon international trade to drive their economies. Thus, it seems possible that the won will decline further against the U.S. dollar, which will cause all sorts of financial pain for both Asiana and Korean Airlines. Case Discussion Questions 1. Why did both Korean Airlines and Asiana Airlines report foreign exchange losses in 2019 and 2020? 2. What could Korean Airlines and Asiana Airlines have done to limit their foreign exchange losses? Why do you think they did not take these steps? 3. Why did the Korean won decline in value against the American dollar in 2020? Could this decline have been anticipated? 4. During 2020, the U.S. dollar fell in value from $1 = 1,200 won in February 2020 to $1 = 1,088 won in December 2020. How do you think this impacted the financial performance of Korean Airlines and Asiana Airlines? EX BETA

The decline in the value of the won against the dollar has primarily been driven by economic uncertainty created by America's tariff- raising binge after Donald Trump became president, and a desire on the part of investors to put their money in safer assets that are less vulnerable to disruption from American-imposed tariffs and trade conflict. Those safe assets have included U.S. Treasury bills. So, investors have taken their money out of other currencies, including Korean won, and put them in U.S. dollar assets. This increases demand for dollars and reduces demand for won-hence, the depreciation in the value of the won against the dollar over the last two years. Page 321 Looking forward, economic uncertainties seem to be increasing due to the spread of coronavirus in 2020 and 2021 and the global pandemic of COVID-19 infections. Economic experts say that the spread of COVID-19 has seriously disrupted global supply chains and dealt a blow to business earnings, hurting countries such as South Korea that depend significantly upon international trade to drive their economies. Thus, it seems possible that the won will decline further against the U.S. dollar, which will cause all sorts of financial pain for both Asiana and Korean Airlines. Case Discussion Questions 1. Why did both Korean Airlines and Asiana Airlines report foreign exchange losses in 2019 and 2020? 2. What could Korean Airlines and Asiana Airlines have done to limit their foreign exchange losses? Why do you think they did not take these steps? 3. Why did the Korean won decline in value against the American dollar in 2020? Could this decline have been anticipated? 4. During 2020, the U.S. dollar fell in value from $1 = 1,200 won in February 2020 to $1 = 1,088 won in December 2020. How do you think this impacted the financial performance of Korean Airlines and Asiana Airlines? EX BETA The decline in the value of the won against the dollar has primarily been driven by economic uncertainty created by America's tariff- raising binge after Donald Trump became president, and a desire on the part of investors to put their money in safer assets that are less vulnerable to disruption from American-imposed tariffs and trade conflict. Those safe assets have included U.S. Treasury bills. So, investors have taken their money out of other currencies, including Korean won, and put them in U.S. dollar assets. This increases demand for dollars and reduces demand for won-hence, the depreciation in the value of the won against the dollar over the last two years. Page 321 Looking forward, economic uncertainties seem to be increasing due to the spread of coronavirus in 2020 and 2021 and the global pandemic of COVID-19 infections. Economic experts say that the spread of COVID-19 has seriously disrupted global supply chains and dealt a blow to business earnings, hurting countries such as South Korea that depend significantly upon international trade to drive their economies. Thus, it seems possible that the won will decline further against the U.S. dollar, which will cause all sorts of financial pain for both Asiana and Korean Airlines. Case Discussion Questions 1. Why did both Korean Airlines and Asiana Airlines report foreign exchange losses in 2019 and 2020? 2. What could Korean Airlines and Asiana Airlines have done to limit their foreign exchange losses? Why do you think they did not take these steps? 3. Why did the Korean won decline in value against the American dollar in 2020? Could this decline have been anticipated? 4. During 2020, the U.S. dollar fell in value from $1 = 1,200 won in February 2020 to $1 = 1,088 won in December 2020. How do you think this impacted the financial performance of Korean Airlines and Asiana Airlines? EX BETA