Korea Air drops in the red

South Korea’s flag carrier Korean Air Wednesday reported a third-quarter net loss of 524.3 billion won (US$457.5 million) due to higher fuel prices and slowing IT exports that hit cargo traffic.

The figure compares with a net profit of 550.7 billion won in the same quarter a year earlier.

Operating profit in the July to September period this year almost halved to 239.3 billion won, from 446.9 billion won in 2010, the carrier said.

“Cargo traffic recorded a year-on-year fall of 5.9%…due to sluggish demand for IT products such as display monitors and cell phones,” the airline said in a statement.

Korean Air said its jet fuel costs soared 34%, exacerbated by a weakening of the won. Fuel costs are typically an airline’s biggest single expense.

The company expressed optimism, however, that a free trade agreement with the European Union and adding more aircraft to its fleet will help boost its international cargo traffic business.

Source - ttrweekly