This file photo provided by Korean Air shows a B787-9 passenger jet taking off from Incheon International Airport, west of Seoul.
SEOUL, May 4 (Korea Bizwire) — Korean Air Lines Co., South Korea’s national flag carrier, said Wednesday it shifted to a net profit in the first quarter from a year earlier on increased cargo deals.
Korean Air swung to a net profit of 543.85 billion won (US$429 million) for the three months ended in March from a net loss of 28.76 billion won during the same period of last year, the company said in a statement.
“Reduced debt and robust cargo demand helped improve the company’s financial status in the first quarter despite rising fuel costs and a weak won,” a company spokeswoman said over the phone.
The company focused on winning cargo contracts to transport high-end products, such as semiconductors, batteries, and COVID-19 testing kits, in the first three months, which helped prop up the quarterly results, the statement said.
Passenger demand is gradually recovering as countries ease their entry restrictions though demand remains sluggish due to the spread of the omicron variant, the statement said.
Korean Air expects its second-quarter earnings will improve further as the Korean government on March 21 lifted the mandatory quarantine for fully vaccinated travelers.
But the carrier remains cautious about uncertainties caused by the pandemic and the Russia-Ukraine war as they will have an impact on its second-quarter earnings.
In March, Korean Air halted the operation of passenger jets to Moscow and Vladivostok, and cargo planes bound for Europe via Moscow due to safety concerns over Russia’s invasion of Ukraine.
The won’s weakness against the dollar and rising fuel costs have emerged as major headaches for the country’s biggest full-service carrier.
The dollar rose to 1,210.80 won at the end of March this year from 1,133.50 won a year earlier, according to the Bank of Korea.
A weak won pushed up jet fuel purchase costs. Korean Air’s spending on jet fuel more than doubled to 663.3 billion won in the March quarter from 328.1 billion won a year earlier, the statement said.
Operating profit jumped over six times to 788.45 billion won in the first quarter from 124.48 billion won a year ago. Sales rose 60 percent to 2.805 trillion won from 1.749 trillion won during the same period, it said.
The quarterly earnings are parent-based results, not consolidated ones.
(Yonhap)
