Korean Air, South Korea’s flagship airline, announced today its results for the fourth quarter and full year ended December 31, 2010.
The airline posted an operating revenue of 2,897.6 billion KRW for the fourth quarter, up 12.4% compared to the same period last year, due to the growth of international passenger business and in particular increased passenger volume on short-haul international routes. Operating profit reached 188.8 billion KRW, an increase of 22.6% compared to Q4 2009. International passenger and cargo businesses remained the major revenue contributors for the airline in Q4, accounting for half and 33.1% of the operating revenue respectively.
For the full year of 2010, the airline recorded an operating revenue of 11,459.2 billion KRW, up 22.0% year-on-year, and operating profit of 1,119.2 billion KRW, a surge of 7.39 times, thanks to the overall recovery of the aviation industry in the year under review and the significant rebound of the international passenger business. Net income for the full year returned to the black and reached 468.4 billion KRW, compared to a loss of 98.9 billion KRW in 2009.
International Passenger Business
The international passenger segment recorded a Y-o-Y growth of 1.6% and 6.5% in passenger carrying capacity and traffic, reaching 19,054 million ASK and 14,318 million RPK respectively. Total passenger number in the fourth quarter recorded an increase of 13% compared to the same period a year ago, with robust growth recorded in markets such as China, SE Asia and Japan. The increased demand of short-haul routes boosted passenger revenue in the fourth quarter by 16.9% Y-o-Y to 1,592billion KRW.
Revenue generated from the cargo segment reached 960billion KRW, up 1.9% Y-o-Y in the fourth quarter. Demand for cargo services worldwide rose steadily as reflected in an improvement in capacity (up 1.8% to 3,235 million AFTK) and traffic (up 1.7% to 2,449 million FTK). The increased cargo traffic was recorded in the industry’s traditional peak season which coincided with the festive season, while the increase of Korea’s outbound cargo traffic of auto parts and machineries fuelled the growth in this segment. Transit cargo traffic, especially from Europe and SE Asian regions, also recorded an increase during the period under review.
As another example of the airline’s long-standing commitment to achieving “Excellence in Flight”, Korean Air has announced its launch of the A380 service to Japan and Hong Kong starting from June 2011. The spacious layout of the super jumbo aircraft offers upmost comfort and privacy to our passengers. With the entire upper deck devoted to business-class travellers, Korean Air has taken customer services to a new level, which will in turn make the airline more competitive. Korean Air will gradually expand its A380 service to Bangkok, New York and Los Angeles later this year. The introduction of the A380 is expected to increase passengers from China, Japan, and East Asia in transit to the US and Europe.
In view of the encouraging rebound in the aviation industry and the promising growth in cargo volume, Korean Air is optimistic about 2011, particularly with regard to international passenger and cargo businesses. The capital expenditure this year will increase by a significant 33% to support Korean Air’s fleet expansion plan.
Korean Air will stay focused on its business expansion strategy while being vigilant to unpredictable challenges in the market. The airline will also spare no effort in maximizing its profitability and is determined to bring its revenue to another peak.
* Exchange rate on December 31, 2010: 1 US Dollar = 1138.9 KRW