Korean Air reported a drop in its second-quarter operating profit, despite posting record revenues on the back of strong passenger and cargo demand.
For the three months ended 30 June, the SkyTeam carrier posted an operating profit of W413 billion ($298 million), down 12% year on year.
Revenues were up 14% to W4 trillion, with passenger travel revenue increasing 10% year on year. “This increase was a result of the airline’s expanded capacity across its networks, including China, and strong business and leisure demand to the Americas and Europe,” states Korean, which saw passenger traffic increase 13% during the quarter, with capacity up 12%.
Its cargo business also saw a rebound, with revenue up 14% year on year to W1.1 trillion, led by a rise in e-commerce demand from Mainland China.
Korean blamed a rise in fuel and manpower costs for the drop in profit. Its second-quarter expenses rose nearly 18% year on year to W3.6 trillion, with fuel-related costs up 20%.
The airline posted a net profit of W349 billion, down 6% year on year.
Korean says it will continue to grow its flight frequencies and expand its charter operations as a means to boost revenues.
“The cargo business will continue to accommodate e-commerce demand with additional charter flights and enhance competitiveness through flexible route operations,” Korean adds.
