Surge in overseas travel puts Korean Air back in the black

Korean Air returned to a profit in the third quarter after carrying a record number of international passengers.

Net income was 340 billion won ($309 million), compared with a loss of 536.3 billion won a year earlier, the nation’s flagship airline said in an e-mailed statement yesterday. That was in line with the 340.1 billion won average of 15 analysts’ estimates compiled by Bloomberg.

The carrier plans to add 55 new aircraft, including five Airbus SAS A380s, by 2018 as it challenges Singapore Airlines and Cathay Pacific for business-class flyers.

The company is also bidding for a 42 percent stake in Korea Aerospace Industries, the nation’s only plane maker, as it seeks to expand its aerospace operations.

International passenger business rose 4.3 percent in the quarter, accounting for 62 percent of sales, Korean Air said. Total sales moved up 2.6 percent to 3.4 trillion won. The carrier said it will also add 10 Boeing 787s as part of its fleet expansion.

Korean Air’s cargo traffic fell 8 percent in the period as the European debt crisis and concerns over the global economy damped demand. The carrier generated about 23 percent of its sales from cargo in the quarter.

Operating profit, or sales minus the cost of goods sold and administrative expenses, jumped 31 percent to 313 billion won, the company said.

Bloomberg