Korean Air Lines swings to a net loss in the third quarter
Korean Air Lines swung to net loss in the third quarter as travel demand continued to remain sluggish due to Covid-19 travel restrictions.
The full-service carrier on Thursday reported a 385.93-billion-won ($342 million) net loss, from 211.85 billion won net loss in the third quarter last year. It swung to loss from the second quarter’s 162.41-billion-won net profit, primarily due to factors related to interest payments and the exchange losses.
It reported 1.55 trillion won in revenue, down 52.8 percent on year and down 8.3 percent compared to the previous quarter. Its operating profit nosedived 93.6 percent on year to 7.59 billion won in the second quarter. Compared to the previous quarter, the operating profit was down 94.9 percent.
Revenue from the cargo transportation business reached 1.16 trillion won in the third quarter. The airline said it raised the operation rate of cargo carriers amid the increased freight rates. It also remodeled the interior of its passenger aircraft to carry more cargo.
“Demand for passenger transportation continues to stay sluggish amid Covid-19, but mid-long-distance routes centering on America and Southeast Asia have slightly improved compared to the second quarter,” the airline said in a statement. It has also seen an increase in non-scheduled flights to Singapore and Kuala Lumpur, while domestic travel during the summer vacation season also helped.
Higher oil prices and seasonal factors may also have been a factor. Demand for transportation isn’t high in the third quarter. Also, the decline in freight charge compared to the previous quarter is seen to have affected the airline’s earnings.
“Decline in travel demand from Covid-19 is projected to continue in the fourth quarter, but demand for cargo is expected to increase due to seasonal factors,” said Korean Air Lines. Semiconductors, auto parts and disinfectant items following the resurgence of the pandemic are expected to increase the demand for air cargo, especially at a time when supply of transportation by cargo ships has fallen.
The airline has set up a task force team responsible for the delivery of vaccines that could be developed early next year.
BY JIN MIN-JI [email@example.com]
More in Industry
Futures at stake, marketers see opportunity in CSAT
Aekyung Group makes executive appointments
Lotte Mart slammed for illegally kicking out trainee guide dog
It's tough at the top, and many would prefer not to try
[NEWS IN FOCUS] It's spinoff time for LG Chem and battery unit