Korean Air reports quarterly profit

Manila Bulletin
July 29, 2011, 3:53pm

SEOUL, Korea (AFP) – Flag carrier Korean Air said it swung to a net profit in the second quarter compared to losses a year earlier, thanks to foreign-currency gains.

But the airline reported an operating loss due to high fuel costs and diminishing travel to Japan after the March 11 earthquake and tsunami.

Korean Air achieved a consolidated net profit of 33.7 billion won ($32 million) from April-June compared with a net loss of 196.7 billion won in the same period last year.

The won's rise led to foreign-currency gains of 164.7 billion won in the second quarter compared to losses of 439.4 billion a year earlier.

But a 34 percent rise in jet fuel costs eroded the bottom line, the company said in a statement.

The airline recorded an operating loss of 19.7 billion won compared to an operating profit of 395 billion a year earlier, while sales were up 2.0 percent to 2.944 trillion won.

Korean Air said it expects a rise in outbound travel and cargo demand in the second half due to reconstruction work in Japan and easing political tensions in the Middle East and North Africa.

It said the addition of five A380 superjumbos on long-haul routes would likely boost profit margins, and a free trade pact with Europe was expected to increase cargo business.

Korean Air Lines said that it would purchase 10 Bombardier CS 300 aircraft for 709 billion won ($675 million).

 The South Korean flag carrier said in a regulatory filing that it could buy 20 additional planes. Korean Air added in a separate filing that it would buy two Boeing passenger planes for 186 billion won.