Korea Air suffers US$2.55 billion operating loss despite 5.9pc sales boost
2012 05 04
- Details
KOREAN AIR has posted a first quarter year-on-year operating loss of KRW114.7 billion (US$101.4 million) drawn revenues of KRW2.88 trillion, which increased 5.9 per cent.
The loss was attributed to the rising price of jet fuel."Compared to the same period last year, there was increased traffic across all routes, including Oceania (up 23 per cent), south east Asia (up 18 per cent) and China (up 14 per cent). While Korea outbound traffic maintained at last year's level, overseas outbound reported an increase of 16 per cent," said the statement accompanying the results.
Cargo volume fell 9.6 per cent to 2,059 million freight tonne kilometres (FTK) as it decreaseD 12 per cent in domestic service and nine per cent. A decrease in outbound cargo was also reported.
"As many China-based airlines have been drastically stepping up cargo capacity, the airline is facing increasingly intense competition in China market," said a company statement accompanying the results.
"As global economy recovers, Korea outbound is expected to show gradual increase. Looking onward, the airline strives to stabilise the business against high and surging fuel price through capacity control and fleet redeployment," said the statement.
In addition, with the introduction of new routes (Incheon-Gatwick and Incheon-Nairobi) and stepping up frequency on selected routes, such as Incheon-Ulaanbaatar, Incheon-Danang, Incheon-Tianjin, Incheon-Vancouver, Busan-Beijing and etc, the airline sees potential growth in passenger traffic.
With the Free Trade Agreement between US and Korea and London Olympics, the outlook for potential growth in cargo traffic in the remaining quarters of the year remains positive, said the statement. "The airline will also strengthen profitability through route operation plan, and will continue to seek sustainable growth in the existing network as well as expanding into new markets.
Source Shipping Gazette - Daily Shipping News
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