Korean Air, South Korea’s flagship airline, announced today its financial results for the third quarter of 2010 ended September 30, 2010. Korean Air’s quarterly operating profit hit a record, sustaining a strong growth momentum during the record period.
Riding on the substantial growth in international passenger traffic and surging demand for cargo traffic as a result of the gradual global economic recovery, as well as the translation gain due to a stronger Korean Won, the airline posted an operating revenue of 3,126.2 billion KRW in the third quarter of 2010, a year-on-year increase of 26.2%. Operating profit amounted to 358.1 billion KRW, which is 2.6 times more than that of the last corresponding period, making it the highest quarterly operating profit in Korean Air’s history. Income before tax and net income of the airline made a significant year-on-year growth of 69.0% and 121%, reaching 600.6 billion KRW and 583.8 billion KRW respectively. International passenger business and cargo business remained the key revenue contributors in the third quarter, accounting for more than half and 30.2% of the operating revenue respectively.
Thanks to the better-than-expected economic rebound in China and Southeast Asia countries, as well as increased world travel during the summer vacation, passenger traffic increased rapidly in the third quarter, with a record 16.1 billion RPK making it the best quarterly performance in the history. Revenue generated from this segment recorded 1,828.9 billion KRW in this quarter, up 21.4% year-on-year.
Korea-outbound traffic achieved a year-on-year increase of 23% while the steady year-on-year increase in the transit and overseas passenger volume of 8% also contributed to the overall surge in the profitability of this segment.
The growth in the cargo traffic has been maintained since the second half of 2009 as a result of increasing exports such as semiconductors and automobile parts. The capacity of the airline’s cargo business was increased by 15.6% year-on-year to 3,216 million AFTK on the picking up of global demand, while the cargo traffic reached 2,402 million FTK, up 13.1% year-on-year. Revenue generated from this segment increased substantially by 42.2% year-on-year to 943.6 billion KRW. Cargo demand in Japan increased and revenue generated from this region recorded a stunning year-on-year increase of 81%.
Korean Air sees an encouraging rebound in the aviation industry going ahead. Equipped with a fleet of 130 aircrafts as of September 30, 2010, the airline has announced extra orders to add Boeing 787s and Airbus 380s to its fleet mix in expanding the capacity. A total of five A380 aircraft will be introduced by the end of next year, with its first A380 scheduled to be delivered next May. With the new A380 service, Korean Air which already flies the most transpacific routes, will become the most dominant Asia-Pacific routes operator and will increase its competitiveness for Asia-Europe routes.
Korean Air is well-positioned to capture the growth derived from the booming world travel demand. The airline will continue its long-standing commitment to achieving “Excellence in Flight” and offering the best service and flying experience to customers. It is committed to further strengthen its position as a leading global carrier.