Korean Air remains Optimistic about the future despite Loss in 2003

Korean Air today announced a net loss of 241.1 billion won for its financial year ending December 31st, 2003. In the previous year, the airline reported a profit of 453.8 billion won. Operating revenue remained stable at 6.2 trillion won, almost the same as the 2002 figure of 6.25 trillion won. However, operating expenses rose by 1.3 per cent, from 5.79 trillion won to 5.87 trillion won.

Korean Air attributed the loss to increased non-operating expenses such as foreign currency transactions. A considerable foreign currency loss of 245 billion won at the end of the financial year was one of the major contributing factor.

Despite the economic setbacks the airline industry suffered as a result of the SARS outbreak and the Iraq war during the first half of the year, the airline posted an operating profit of 308.1 billion won for 2003. While the revenue from international passengers fell from 2.98 trillion won to 2.77 trillion won, the strong cargo demand made up for the reduced international passenger demand.

Announcing the figures, Korean Air’s Chairman and CEO, Y.H. Cho, said: “Although we were in the red during 2003, we are not discouraged by the results, because we believe we have the right ingredients for a better 2004. Our cargo division’s operating revenue increased by 7.2 percent, from 1.79 trillion won to 1.92 trillion won; and the cargo volume remained robust, due to strong IT demand.”

Mr. Cho said he is very optimistic about the airline’s future outlook. “With indications of economic revival throughout the region, as well as globally, we are convinced Korean Air has bright prospects for this year and beyond,” he added.