Asiana Airlines Inc reported on Friday a deeper operating loss than expected after North Korean tensions hurt travel demand, with further weakness seen in the current quarter following the July plane crash in San Francisco.

The accident, in which three were killed and over 180 injured when an Asiana flight from Seoul crash-landed at the airport in San Francisco, has hurt the reputation of Asiana. The airline had been trying to clean up a tarnished safety record that included two other fatal crashes in its 25-year history.

Uncertainty looms over the results of ongoing probes by U.S. and Korean authorities over the accident and how the accident will affect travel demand in the current quarter, analysts say.

“The accident may have an impact on passenger demand in the second half, as seasonal demand is weakening after the summer holidays are over,” said Park Sung-bong, an analyst at Hana Daetoo Securities.

“The cause of the accident has not been verified yet, so it is difficult to assess compensation costs,” he said.

Asiana Airlines, South Korea’s second-biggest carrier after Korean Air, reported an operating loss of 29.9 billion won ($26.9 million) in its April-June second quarter, more than double the 12.2 billion won loss forecast on average by analysts.

It was its third straight quarterly loss. A year earlier, it had earned an operating profit of 38.9 billion won.

Shares of Asiana fell to their lowest since April 2010 following the results.

“The heightened North Korean risk and the outbreak of new bird flu in China significantly decreased demand from Japanese visitors and Korean tourists to China in the second quarter,” Asiana said in a statement.

It said cargo shipments also decreased as a weak global economy hurt demand for cars and liquid-crystal displays. A weaker yen has also sapped travel demand from Japanese travellers.

“Demand for the lucrative Korea-Japan routes is showing little sign of recovering. The same for cargo demand,” Park said.

Asiana said it will enhance its competitiveness by introducing new routes to Bali and Jakarta and new aircraft such as the A330 and A321 in the third quarter. It did not give an earnings outlook.

Asiana is expected to book about 20 billion won in non-operating losses in the current quarter on the loss of the jetliner in the crash, analysts say.

Families of the three passengers who died after the crash have retained the prominent New York law firm Kreindler & Kreindler to represent them as legal maneuvering over liability and damages heats up.

Asiana shares have dropped more than 8 percent since the crash. As of 0309 GMT they traded down 1.5 percent at 4,620 won, their lowest since April 2010, underperforming the wider market’s 0.1 percent gain.($1 = 1113.0000 Korean won)

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Photo Credit: Asiana posts loss as NKorea, bird flu dent travel. Associated Press