Korean Air posts second quarter loss on high costs

Korean Air Lines reported a net loss in the second quarter due to higher non-operating costs, while inking a record operating profit, according to Dow Jones Newswires.

The South Korean flag carrier shifted to a net loss of US$197.12 million in the three months ended June 30, compared with a net profit of $66.38 million a year earlier.

"A stronger won (against the US dollar) drove up non-operating expenses, in particular dollar-denominated debts in books," a company spokesman said.

Non-operating costs shot up to $550 million in the April-June period, compared with the year-earlier period when the company inked $186.97 million in non-operating gains on a weaker won.

The carrier reported a record high operating profit of $297.75 million in the second quarter, which compares with an operating loss of $107.65 million in the year-earlier quarter.

"The quarterly bottom line got a hefty boost from a sharp increase in outbound travel to neighbouring countries such as China and Japan and in long-haul routes to Europe and the US helped by South Korea's inclusion in the US visa-waiver programme," said the statement.

Korean Air said it expects its profitability to improve sharply from the third quarter as it plans to start services to Hong Kong, Osaka and Bangkok from the city of Cheongju in the second half and to increase international flights from the Incheon international airport to destinations including Atlanta and Los Angeles.

As the economy recovered, cargo deliveries of liquid crystal displays, semiconductors and automobile parts sharply increased to countries such as the US and Europe, it said.
(Source:www.cargonewsasia.com)