FLAGSHIP carrier Korean Air has announced a fourth quarter net loss of KRW659.5 billion (US$474.4 million) for the three-month period between October and December 2008. The result marks the carrier's fifth consecutive quarterly loss.
"For 2009, Korean Air aims to earn KRW10.3 trillion KRW in operating revenue and achieve KRW600 billion in operating profit, while increase its investment by 50 per cent to KRW870 billion from 2008," the company declared.
"Korean Air's goal for 2009 is to operate profit-oriented business management to achieve black-ink balance. To reach this goal, the airline is focusing on increasing overseas travel demand through its Incheon hub," it said.
This may be helped by a programme to waive visas for South Koreans travelling to the US, said the company.
Through 2008, the airline suffered a loss of KRW1.96 trillion (US$1.39 billion) largely due to the weakness of the South Korean currency, which fell 26 per cent against the US dollar last year, raising imported fuel and plane leasing costs and producing heavy foreign exchange conversion losses.
The hefty 2008 loss comes in spite of the carrier's operating revenue rising 16 per cent year on year to a record high of KRW10.21 trillion in 2008.
The result is dramatically worse than the net loss of KRW35.3 billion the airline posted for the fourth quarter of 2007, although an improvement on the third quarter 2008 loss of KRW684.1 billion. The carrier made a profit of KRW10.7 billion in 2007.
The 2009 plan is based on an estimate that aviation fuel will cost significantly less at US$75 per barrel at WTI prices and the airline has factored in a lower exchange rate of US$1: KRW1,200.
It also said it planned "aggressive investment in 2009 to maintain and nurture a foundation for future growth."
Major investments in 2009 include the introduction of five new aircraft including three Boeing 777-300ERs, construction of the Tianjin Air Cargo Terminal in China, and Aerospace Division participation in Boeing787/Airbus A350 next generation aircraft parts manufacturing.
The airline has 10 Airbus A380s on order, after announcing earlier this week that it has ordered two more of these superjumbo jets from the European aircraft manufacturer.
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