Lower Fuel Prices Boost Korean Air

Seoul-Korean Air Company said Friday it swung to a net profit due to lower jet-fuel prices and a strengthening won against the dollar, adding that it expects to see stronger sales in the second half.

For the three months ended June 30, South Korea?s largest carrier by sales posted a net profit of $64 million, shifting from a net loss of $233 million a year earlier.

Operating losses widened to $103 million from $94.1 million as demand was hit by global concern about swine flu, while sales fell 16 percent on year to $1.68 billion from $2 billion.

For the three months ended June 30, South Korea?s largest carrier by sales posted a net profit of $64 million, shifting from a net loss of $233 million a year earlier.

Analysts said that as a stronger won pushes down fuel costs and pushes up outbound travel demand, Korean Air will likely swing to an operating profit in the third quarter. Shin Min-seok at Daewoo Securities forecasts an operating profit of $237 million in the July-September period.

Jet fuel costs decreased 40 percent to $538 million in the second quarter from $898 billion in the year-ago period, the company said in a statement.

The US dollar, which fell 8 percent against the won at the end of June from the end of March, which also helped drive down the company?s spending on fuel, it said.

Foreign exchange translation gains soared to $332 million in the second quarter from $39.5 million a year earlier, while foreign exchange loses fell to zero from $221 million, said the statement.

The company expects to see stronger demand from outgoing travelers in the second half on a stabilizing won and easing concerns about swine flu.

Sourced = The Cambodia Daily