ATW Daily News

Korean Air posts second straight quarterly profit

Wednesday November 11, 2009

Korean Air posted third-quarter net income of KRW264 billion ($227.9 million), a dramatic turnaround from the KRW684.1 billion loss it suffered in the year-ago period, marking its second straight profitable reporting period after six consecutive quarterly losses.

The year-ago third quarter was KE's largest single quarterly loss in 14 years. It attributed the reversal to lower fuel prices, a stronger won and a better performance in its international passenger business. It said it expects to deliver further performance improvement over the next year if oil prices stabilize and the won continues to strengthen.

Third-quarter revenue fell 10% to KRW2.48 trillion while expenses decreased 14.7%. KE did not provide an expense figure. It recorded an operating profit of KRW100.1 billion, reversed from a year-ago loss of KRW25.1 billion.

International passenger traffic increased 4.4% to 14.52 billion RPKs as capacity lifted 3.7% to 19.43 billion ASKs, producing a load factor of 74.7%, up 0.5 point. Cargo capacity declined 6.5%. KE's international passenger business was the largest contributor to its operating revenue (a 55.7% share, up 2.1% year-over-year) while passenger traffic on US routes improved following implementation of the US-South Korea visa waiver accord. Easing concerns over the spread of swine-flu also helped revive demand, it said.

Separately, Guggenheim Aviation Partners this week took delivery of its first 777-300ER, which is slated for lease to KE. It is the airline's first leasing arrangement with the company; the aircraft will be its 25th 777.

by Christine Boynton

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