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Korean Air posts net loss of $151 million in Q1

May 15, 2014
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Korean Air Lines Co. says it posted a net loss of 155.8 billion won (US$151.7 million) in the first quarter. (Yonhap)

SEOUL (Yonhap) — Korean Air Lines Co., South Korea’s top air carrier, said Thursday it posted a net loss of 155.8 billion won (US$151.7 million) in the first quarter, mainly due to unfavorable exchange rates that affected interest rate payment and higher financial costs.

Operating profit stood at 21.2 billion won in the same period, with sales edging up 1.8 percent from the year before to some 2.89 trillion won, the company said in a regulatory filing.

Despite net profits being in the red, it was less than the loss of 303.4 billion won tallied for the first three months of 2013.

In the first quarter of last year, Korean Air reported an operating loss of 146.6 billion won, with sales reaching 2.84 trillion won.

“The net loss was brought on by exchange rate changes that increased the company’s debt servicing burden and generally resulted in higher financial outlays,” a corporate source said.

He, however, said the company was able to haul more passenger and deliver more air cargo that helped operating profits and sales.

The airline said improvements took place in both the revenue passenger kilometers (RPK) and freight ton kilometer (FTK) numbers.

In terms of RPK, numbers for the Chinese and European routes rose 11 percent and 2 percent, respectively. FTK figures for Southeast Asia and North America were up 16 percent and 10 percent, each.

For the coming months, Korean Air said it will strengthen passenger services to North America and Paris by deploying its A380 super jumbo jets, while launching new flights to places such as Houston.

Cargo volume is expected to go up as South Korean companies rush to ship out more mobile information technology products abroad and demand for air cargo and passenger service has been growing in China, Vietnam and Latin America, it said.

The company said it wants to push up sales to 12.56 trillion won this year, up 7 percent from last year. The flag carrier is moving to add new aircraft to its fleet, for instance, two more Airbus A380 jets along with three A330 wide-bodied passenger planes.

Shares of Korean Air closed at 33,450 won on Seoul’s main bourse Thursday, a 0.3 percent, or 100 won, fall from the day before, compared with the 0.03 percent dip in benchmark KOSPI. The airline’s first-quarter results were released right after the market closed.