Growth in passenger demand and a reduction in costs saw Korean Air’s net profit in the third quarter surge 58.7% year-on-year to 154.2 billion won, compared to
97.2 billion won a year ago. Operating revenue for the airline rose 6.8% year-on-year to 2,120.8 billion won in the third quarter, from 1,986.5 billion won in 2004.
Operating profit grew by 25.5% to 268.1 billion won during the period and non-operating income dropped 14.6% year-on-year to 67.6 billion won.
The operating profit margin was up 1.8 percentage points to 12.6% in the third quarter this year, compared to 10.8% a year ago.
“We are very pleased to see the outstanding financial performance of the company,” said Jonghee Lee, president of Korean Air.
“Despite increasing fuel costs, we were able to contain our overall operating expenses. In fact, we saw lower rent, labour and maintenance costs, and were therefore
able to report an improved profit margin.”
Due to surging oil prices, Korean Air saw fuel costs jump 29.6% to 568.9 billion won in the third quarter this year. The increase was less than the hike in jet fuel
prices in US dollars - 47.3% year-on-year - due to the appreciation of the Korean won.
Overall operating expenses rose a modest 4.5% year-on-year to 1,852.8 billion won, compared to 1,772.9 billion won a year ago. Rentals went down 24.3%
year-on-year, whereas maintenance and labour costs dropped a comparative 6.2% and 6.5% respectively.
At the end of the third quarter this year, total assets and total liabilities each went down 0.7% and 2.8%, respectively, while shareholder’s equity went up 4.7%. The debt to equity ratio was down to 242% or 14 percentage point from 256% at the end of last year.
Interest bearing debt, which stood at 8.1 trillion won last year, dropped 3.7% to 7.8 trillion won at the end of the third quarter.
“We are proud to present a solid financial position. At Korean Air we are always trying our best to enhance shareholder value,” said Lee.
Korean Air also reported good operating results in the third quarter this year. Although available seat kilometers (the unit representing passenger capacity) for domestic
passenger went down 5% year-on-year, domestic revenue was up a comparative 7.4% as load factor and yield rose 6.7 percentage points and 15%
respectively compared to a year earlier.
Revenue from international passengers grew 12.6%, thanks to a 9% growth in revenue passenger kilometers (a unit representing the distance flown by
paying passengers) and fuel surcharges on all routes that helped lifted yield up to 17% during the reporting period.
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