Korean Air Swings To Q1 Net Profit

Korean Air returned to profit in the first quarter as a foreign currency related gain boosted the bottom line.

Consolidated net profit for the quarter to end March was KRW559 billion (USD$496 million), from the prior year period’s loss of KRW175 billion. The foreign currency gain added KRW747 billion to the result, from KRW89 billion in 1Q16.

First quarter revenue was KRW2.87 trillion, flat from last year’s first quarter, with operating expenses coming in at KRW2.68 trillion, a 5.1 percent increase. Operating profit was 40.8 percent down at KRW192 billion.

Passenger RPK traffic on international routes fell 0.5 percent on decreased ASK capacity, down 4.4 percent. Load factor rose 3.2 percentage points to 80.3 percent as a result. Domestic capacity edged up 1.7 percent, and with RPK traffic 6 percent higher, load factor jumped 3 percentage points to 75.4 percent. The total number of passengers carried dropped 1 percent in the quarter.

Cargo traffic was up 7.9 percent on a capacity increase of 3.2 percent.

Looking forward Korean Air expects outbound demand to increase in the second quarter due to a long holiday in May.