Korean Air is considering network adjustments as it posted a first quarter operating loss of 114.7 billion KRW (US$101 million).
Revenues for the quarter came in at 2,880.2 billion KRW, up 5.9% compared to the same period last year, while net loss came in at 67.2 billion KRW. The carrier says as it was hit by high fuel prices, smaller foreign exchange gains and weak cargo demand.
“Looking onward, the airline strives to stabilize the business against high and surging fuel price through capacity control and fleet redeployment,” says the carrier, adding that it expected traffic conditions to improve with global economic recovery.
International available seat kilometres (ASKs) were up 12.6% to 21,114 million, while revenue seat kilometres were up 9.7% to 15,989 million compared with the previous year.
Compared to the same period last year, it saw increased traffic across all routes, including Oceania (up 23%), South-east Asian countries (up 18%), and China (up 14%).
“With the introduction of new routes (Incheon – Gatwick and Incheon – Nairobi) and stepping up frequency on selected routes, such as Incheon – Ulaanbaatar, Incheon – Da Nang, Incheon – Tianjin, Incheon – Vancouver, Busan – Beijing and etc., the airline sees potential growth in passenger traffic,” says the carrier.
Cargo traffic recorded a year-on-year fall of 9.6% to 2,059 million freight tonne kilometres (FTKs) as it saw a year-on-year decrease of 12% and 9% in Korea outbound traffic and transit traffic respectively.
“As many China-based airlines have been drastically stepping up cargo capacity, the airline is facing increasingly intense competition in China market,” says Korean Air.