News
Korean Air posts $216 million second quarter loss
August 19th 2016
Korean Air, a SkyTeam carrier, this week posted a second-quarter net loss of 251 billion won ($221 million), having grown from a net loss of 169 billion won in the year-ago quarter, despite an improvement in operating profit. Read More » The airline’s international passenger boardings were up 6% during the quarter on 3.6% expanded capacity.
The flag carrier recorded an operating profit of 159 billion won for the quarter ended June 30, a considerable turnaround from a 2.6 billion won loss a year earlier, but achieved largely from a 29% decline in fuel costs.
Korean Air’s operational gains were more than offset by foreign exchange fluctuations and significant losses on its investment in Hanjin Shipping, a logistics firm under the umbrella of the parent, Hanjin Group.
In the third quarter, the carrier will boost frequencies to Amsterdam and Honolulu, but will suspend services to Sao Paulo, its sole remaining link to South America.
Korean Air’s disappointing second quarter figures must have been music to rival Asiana Airlines’ ears. South Korea’s second largest airline last week posted significant second quarter improvements. In the April-June period, the Kumho Group full-service carrier posted a net loss of 26.7 billion won ($24 million), down 68% from a net loss of 85.4 billion won in the year-ago quarter. However, Asiana achieved a 28.8 billion quarterly operating profit through to June 30, reversing a 67.1 billion won loss the previous year.
"The company's profitability improved on a sharp increase in the number of local residents going abroad, while demand in China, Japan and Southeast Asian countries for flights to South Korea also jumped from a year earlier," Asiana said.
In other South Korean updates, Jeju Air on Tuesday said it planned to order three additional B737-800s directly from Boeing for expansion purposes through to 2018. The LCC now operates 25 leased B737-800s, with a further two due before year-end. Moreover, the carrier has said it will use 60 billion won to build a high-rise hotel near Hongik University in Seoul’s Mapo-gu district.
