KAL, Asiana Airlines enjoy an improved Q1Korea’s top two air carriers posted improved first quarter performance compare to a year ago thanks to rising number of incoming Chinese tourists.
Korean Air Lines, Korea’s largest air carrier, said yesterday that it had operating profit of 21.2 billion won ($20 million) in the January-March period, which is an impressive turnaround considering the company had 146.6 billion won loss year ago.
In addition, the affiliate of Hanjin Group saw sales growing 1.8 percent on-year to 2.89 trillion won, while net losses have shrunk in half to 155.8 billion won.
No. 2 player Asiana said that it had operating loss of 2.1 billion ($2 million) in the first quarter, but this is 19 billion won improvement from last year’s same period. Net losses also narrowed down to 46.6 billion won in the first quarter, 1.6 billion won better than a year ago.
The affiliate of Kumho Asian Group said sales dropped slightly, 0.47 percent on-year, to 1.41 trillion won in the first three months.
Both air carriers said that flights operating from and to China have promoted good first quarter result despite flights flying from and to Japan is on slump due to weak yen.
KAL said that its revenue passenger kilometer (RPK), which is calculated by multiplying the number of paying passengers by the distance traveled, from Chinese flights increased 11 percent on-year, while Asiana said that its sales from China-operating flights also increased as more Hallyu (Korean Wave) fans are visiting.
Unlike rest of Korean exporters, two companies also cited that strong Korean won also helped them to improve its financial conditions.
“The strong won prompts travel demand from Koreans and decreases our interests and payments which are measured in the U.S. dollars,” a spokesman from KAL said. “Outbound passengers from Korea increased 4 percent in this first quarter.”
Not only passenger transports, but also their cargo businesses were better than last year.
KAL said that freight ton kilometer (FTK) numbers in Southeast Asia and North America routers were up 16 percent and 10 percent, respectively. Asiana said that its cargo business also went well with increased cargo volume of ultra high definition television, automobile parts and mobile phones.
For second quarter, both airlines signaled tight competition in long-haul flights with their Airbus A380 aircraft. KAL said that it will operate the double-decker jumbo jest to North America and Paris, while flying new routes such as Houston.
Asiana will bring two A380s in this quarter and fly to Tokyo and Hong Kong next month followed by Los Angeles in August.
For cargo business, both companies expected to have better results with release of new products and more active trades following the FIFA Brazil World Cup next month.
BY JOO KYUNG-DON [firstname.lastname@example.org]