Korean Air reports 5.5 % Passenger Growth in May 2005

Korean Air reported a 5.5% growth in passenger traffic in May 2005, thanks to increasing capacity to China, Europe and the US.

Revenue passenger kilometer (RPK) - a unit to measure distance flown by paying passengers - grew to 4.039 billion RPK in May. Despite a drop in domestic traffic and slowing passenger flow to Japan and South East Asia, passenger traffic between Korea and China jumped 32% year on year to 204.4 million RPK last month. The capacity between the two Asian countries also rose 14.5% to 292.5 million ASK (available seat kilometer).

"We see a strong growth in China, thanks to the substantial capacity increase between Korea and China," said Mr. Jong hee Lee, the president and COO of Korean Air.

With expanded services to London, Amsterdam and Zurich in Europe, Atlanta, Chicago and Washington D.C. in the US, Korean Air saw rising passenger traffic in both markets. While ASK on its Europe operations rose 24.1%, RPK increased 15.9% last month. The U.S. showed a 14.9% increase in ASK and a 7.1% growth in RPK.

With air freight capacity dropped 2.8% to 861.8 million AFTK (available freight tonne kilometer) in May, Korean Air saw cargo traffic drop 4.7% to 667.7 million FTK (freight tonne kilometer). But with expanded capacity to Guangzhou, Hangzhou and Shanghai, cargo traffic between Korea and China jumped 44.9% year on year to 28.5 million FTK last month. Cargo flown between Korea and Europe also increased by 22.1% to 221.6 million FTK, thanks to added capacity on Amsterdam and Frankfurt combined with the booming India market.

For the first five months, Korean Air carried 8.71 million passengers, down 4.7% year on year. It flew 800,340 tonnes of cargo, down a comparative 1.3%.

Due to the rising oil price, Korean Air will expand its fuel surcharge on all outbound international flights starting July 1. Should jet fuel price exceed 150 US cent/gallon, a surcharge of US$15 will be imposed on short-haul routes and US$30 will be applied to long-haul flights.

For cargo, a maximum of 480 KRW/kg will be imposed as fuel surcharge should jet fuel cost hit 140 US cent/gallon or above.

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