SEOUL, Aug. 2 (Yonhap) — Korean Air Co., South Korea’s top airline, reported Wednesday that its second-quarter net income had dropped by 18 percent from the same period in the previous year due to increased operating costs.
The net profit for the three months ending in June was 371.5 billion won (US$286 million), a decrease from 450.4 billion won the year before, the company said in a statement.
The statement said that the higher number of flights had caused airport usage fees and aircraft operating costs to rise, leading to the decline in profits.
Operating profit dropped 36 percent to 468 billion won in the June quarter from 735.9 billion won a year ago. Sales increased 6 percent to 3.535 trillion won from 3.332 trillion won during the same period.
Sales in the passenger business division more than doubled to 2.221 trillion won in the second quarter from 874.2 billion won a year earlier as the company preemptively increased the number of flights, the statement said.
However, sales in the cargo business division plummeted 56 percent to 963.8 billion won from 2.171 trillion won during the cited period as air freight rates decreased due to lower cargo transport demands, it said.
In the third quarter, the Korean national flag carrier predicted that higher passenger travel demands would boost its bottom line, but cargo delivery demands would remain low due to an economic slowdown.
From January to June, net income decreased 27 percent to 726.89 billion won from 994.27 billion won a year earlier.
Operating profit plummeted 42 percent to 882.98 billion won in the first half from 1.524 trillion won during the same period. Sales rose 9.7 percent to 6.731 trillion won from 6.138 trillion won.
The carrier’s second-quarter results are parent-based tentative figures, not consolidated ones. Final and consolidated results are set to be released later this month.