S. Korean Airlines Lag Behind Int'l Competitors in Profitability | Be Korea-savvy

S. Korean Airlines Lag Behind Int’l Competitors in Profitability


The South Korean FSCs, however, lagged behind their international competitors by a greater margin in terms of profits. (image: KobizMedia/ Korea Bizwire)

The South Korean FSCs, however, lagged behind their international competitors by a greater margin in terms of profits. (image: KobizMedia/ Korea Bizwire)

SEOUL, Feb. 6 (Korea Bizwire) – South Korea’s major airlines continued to do well in terms of sales last year, but their profitability fell far short of those of other global airlines, market data showed Monday. 

In a 12-month period starting from September 2015, sales of South Korea’s largest full service carrier (FSC), Korean Air Lines Co., came to US$10.1 billion, according to the data compiled by U.S.-based Airline Weekly. 

The amount marks the 18th largest among 72 global airlines surveyed. 

Sales by Asiana Airlines Inc., South Korea’s second-largest FSC, came to $5.02 billion, the 28th largest. 

The two South Korean airlines trailed top airlines, such as American Airlines Inc., whose sales came to $40.02 billion over the cited period, immediately followed by Delta Air Lines Inc. with $39.68 billion.

The South Korean FSCs, however, lagged behind their international competitors by a greater margin in terms of profits. 

In the one-year period, Korean Air posted an operating profit of $72 million, while Asiana Airlines posted an operating profit of $66 million, the 46th and 49th largest, respectively, out of the 72 airlines studied. 

American Airlines, on the other hand, posted an operating profit of $3.98 billion, while Delta Air posted a $4.34 billion profit. 

Market observers here blamed the lack of lucrative domestic routes for the local airlines’ low profitability. 

“The airlines need to think more strategically when opening or shutting down their routes,” an observer said. “Increasing their stockpile of jet fuel when the price is low could also be a way to cut their costs.”

(Yonhap)

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