KAL bleeds in 2020 but not as much as year before
Korean Air Lines reported a net loss last year, as Covid-19 restricted international travel, but less than the year before.
The carrier Thursday reported a net loss of 228.1 billion won ($203.9 million) in a preliminary report released Thursday, 60 percent less than the previous year's 568.7-billion-won loss.
Revenue was down 40 percent to 7.4 trillion won, while its operating profit declined 17 percent to reach 238.3 billion won.
It did not report fourth-quarter earnings for last year.
The airline blamed Covid-19 for its reduced revenue.
Revenue from passenger flights was down 74 percent on year, although cargo revenue rose 66 percent to 4.25 trillion won, as “part of the demand for marine transportation was shifted to air transportation.”
Demand for transporting Covid-19 test kits and automobile parts led the growth.
The company was able to cut costs as employees went on rotational leaves, and it paid fewer fees for flight facilities.
The aviation industry around the world struggled in 2020.
Worldwide revenue passenger kilometers, which represent one passenger carrying one kilometer (0.62 miles), were down 75.6 percent last year compared to the year before, according to the International Air Transport Association. Cargo ton kilometers, the equivalent metric for the cargo business, fell 11.8 percent during the same period.
Korean Air Lines admitted this year doesn't look much better with the prolonged pandemic.
“The International Air Transport Association projects demand for passenger flights will hover around 50 percent of the demand seen in 2019,” said Korean Air Lines in a statement. “Demand for cargo transportation is projected to reach a level similar to that seen in 2019.”
The carrier plans to ship a lot of Covid-19 vaccines this year.
Rotational leaves for employees will continue to save costs. It is also issuing stock worth 3.3 trillion won for the acquisition of smaller Asiana Airlines.
Korean Air Lines will maintain its number of passenger flights at the current level until the second half of the year, when the effectiveness of vaccines is shown.
Jin Air, 60-percent owned by Hanjin KAL, saw its net loss grow in 2020.
It reported a net loss of 190.4 billion won last year, 135 percent more than a year earlier. Revenue fell 70.1 percent during the same period to 271.8 billion won.
BY JIN MIN-JI [firstname.lastname@example.org]