Korean Air records net loss for the second year

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Korean Air records net loss for the second year

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Amid efforts to overcome last year’s infamous “nut rage” incident, Korean Air announced its 2014 earnings on Thursday in which it failed to post a net profit.

KAL, the nation’s largest flag carrier, said on Thursday that its net loss for 2014 was 457.8 billion won ($412 million), 70.2 billion won worse than the previous year. The company said the decrease was caused by the strengthening of the won against the dollar and rising interest payments.

However, the company said its return to making an operating profit was a positive sign. KAL recorded an operating profit of 395 billion won in 2014, a big increase from its 2013 operating loss of 19.6 billion won. Its revenue increased 0.5 percent year-on-year to 11.9 trillion won.

The affiliate of Hanjin Group saw a significant operating profit increase in the fourth quarter after international oil prices took a steep dive. From September to December, KAL posted an operating profit of 152.9 billion won, up 758 percent from the same period the previous year.

The air carrier said that its revenue passenger kilometers (RPK), which is calculated by multiplying the number of passengers on a flight by the distance traveled, increased by 10 percent in flights departing from Korea in the fourth quarter.

In cargo, its freight ton kilometers (FTK) increased by 13 percent for Oceanian routes and 12 percent for American routes. The volume of cargo departing Korea for America increased 39 percent in the fourth quarter.

“For passenger transportation, we will reinforce the SkyTeam alliance and relationships with other air carriers, while focusing on securing ‘high-class’ demands in flights,” KAL said. “For cargo, we aim to secure a new source of revenue such as delivering medical and fresh agricultural products to improve profitability.”

KAL also announced that it will add five B777F cargo jets to its fleet.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]

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