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Korean Air Q1 net loss sharply widens due to foreign exchange loss

 Korean Air Lines Co., South Korea's top air carrier, said Friday its net loss sharply widened in the first quarter of 2013 from a year earlier due to foreign exchange loss.

   Consolidated net loss reached 300.6 billion won ($285 million) in the January-March period, up from a 64.2 billion won loss a year earlier, the carrier said in a regulatory filing.

   The figures also represent a sharp decline from a profit of 140.1 billion won in the fourth quarter of last year.

   The carrier said its foreign exchange loss stood at 254.6 billion won for the January-March period, compared with a net gain of 146.7 billion won a year earlier.

   The carrier's debts stood at 14.6 trillion won as of March 31. Among them, debts denominated in the U.S. dollar and the Japanese yen accounted for 59.9 percent or $7.88 billion, and 8.6 percent or 106.5 billion yen, respectively, according to the carrier.

   The South Korean won rose 4.6 percent against the Japanese yen in the first three months of this year, while the Korean currency fell 7.9 percent against the U.S. dollar.

   The Japanese yen has been declining against the U.S. dollar since last year when Tokyo kicked off aggressive monetary easing to help boost its economy.

   The airline said it posted an operating loss of 123.4 billion won, up from a 98.8 billion won operating loss a year earlier.

   Sales also dipped 2 percent on-year to 2.9 trillion won in the three months ending March 31.

   The carrier said it spent 1.1 trillion won to buy jet fuel in the cited period, down 9 percent from the same period last year.

   Passenger traffic on international flights rose 3.1 percent from the same period last year, though passenger traffic on domestic flights dropped 15.8 percent.

   "Even though it is expected that the continued weakening of the Japanese yen and the North Korean threat will suppress the inbound demand from Japan and China, outbound demand will get stronger from May," the carrier said.

   Korean Air said its domestic and international cargo shipments fell 12.7 percent, though it said the launch of new smartphones and cherry shipments would have a positive effect on the second quarter.

   Korean Air said it plans to introduce two A380s, two B737s and a B777 this year.

   Shares of Korean Air closed at 34,950 won on the Seoul bourse on Friday, down 0.57 percent from the previous session. The earnings statement was released before the market closed. (Yonhap News)

Korea Herald daum