Korean Air Consolidates Recovery With Third Quarter Net Profit

Korean Air today announced that it made a net profit of 227 billion won (approx. HK$1.42 billion) during the third quarter of this year. This is more than four times the net profit of 55.4 billion won achieved in the third quarter of 2002, and it accelerates the progress of the airline’s recovery after scoring the net loss of 375 billion won in the first quarter. Korean Air made a net profit of 91 billion won in the second quarter this year. However, the operating profit for the third quarter of 2003 fell by 19.4 per cent from last year; from 204 billion won to 165 billion won.

The operating revenue is 1.69 trillion won (1,689 billion won) which is almost the same as the last year’s figure (third quarter 2002: 1,694 billion won), while operating expenses were up by 0.8 per cent, from 1.21 trillion won (1,210 billion won) to 1.22 trillion won (1,220 billion won) due to the factors such as high fuel costs.

Announcing the figures, Korean Air Chairman and CEO, Y.H. Cho, said: “The results are encouraging. Our operating revenue has recovered to the level of last year’s.”

“The deficit in the first half of 2003 was mainly due to the impact of SARS and war in Iraq, which slashed the demand for travel. So, we have implemented emergency response plans with which we can reduce unnecessary costs and improve efficiency without compromising service quality. And we have poured considerable amount of efforts on building up our core strength and most profitable businesses such as cargo”, Mr. Cho added.

Another helpful factor is the continued strength of the Korean won, which has enabled the airline to score considerable foreign currency gains.

Mr. Cho is optimistic about the company’s overall prospects. “We have weathered many other challenges, and we are advancing on a steady course into the future. Overall demand is growing progressively, and we expect to make a profit during the fourth quarter and the year as a whole.”