Korean Air rises despite Hanjin crisis

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Korean Air rises despite Hanjin crisis

Korean Air posted a record operating profit in the third quarter despite losses from its logistics subsidiary Hanjin Shipping’s crisis. The company attributed its gains to low international fuel prices, a stable local currency and an increased demand for flights.

The nation’s top airline said in its earnings report on Tuesday that operating profit surged 34.9 percent year on year to 447.6 billion won ($394.5 million) and revenue grew 4.7 percent year on year during the third quarter. The company also posted 428 billion won in net profit, compared to a net loss of 510 billion won a year ago.

The earnings results were unexpected, given the 825.1 billion won in losses from Hanjin Shipping. The earnings included damages the company saw as the shipping company’s major shareholder and from the financial aid it provided toward its recovery. “Now that Hanjin Shipping is under court receivership, the group does not have any future plans for financial aid, meaning the crisis will not impact Korean Air’s debt ratio any further,” said a company spokesman.

Korean Air’s shares closed at 31,700 won on Tuesday, down 1.4 percent from the previous trading day.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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