Manila Bulletin
May 5, 2011
SEOUL, May 4 (AFP)– South Korea's flag carrier Korean Air said its first-quarter net profit rose almost 50 percent from a year earlier as a stronger won helped cut the cost of repaying foreign-currency debts.
Net profit in the three months ended March 31 rose to 282.1 billion ($263 million) from 188.7 billion won a year earlier, the company said in a statement.
But operating profit fell 41 percent year-on-year to 162.9 billion won in the first quarter as higher oil prices pushed up expenses. Revenue was up 7.2 percent to 2.821 trillion won.
Fuel costs totalled 995 billion won, accounting for almost 39 percent of first-quarter operating expenses compared to 33.4 percent a year earlier.
''Jet fuel prices were so high that a strong won didn't absorb all of the impact resulting from high input costs, which hurt operating profit in the quarter,'' a company spokesman told Dow Jones Newswires.
Analysts forecast travel demand to Japan will remain weak in the second quarter following the March tsunami, but that it will be offset by seasonal demand on routes to China, Southeast Asia and the United States.
''As higher fuel costs will be reflected in fuel surcharges beginning the second quarter, it along with a strong won will help trim rising costs,'' said Yoo Deuk-Sang, an analyst at Dongbu Securities.
Korean Air has placed a firm order for Airbus airliners worth about 1.0 billion dollars (674 million euros) at catalogue prices, Airbus said on Tuesday.
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