Korean Air swings to loss in Q2
Korean Air said Thursday it swung to a net loss in the second quarter of this year, hit by a 300 million dollar fine imposed by the US Justice Department for price-fixing.
By Agencies |
SEOUL: South Korea's main flag carrier Korean Air said on Thursday it swung to a net loss in the second quarter of this year, hit by a 300 million dollar fine imposed by the US Justice Department for price-fixing.
The company posted a quarterly net loss of 214.4 billion won ($232.5 million), reversing a year-earlier net profit of 14.9 billion won.
The fine was announced on Wednesday, but the airline said it had made provision in the second-quarter accounts for a penalty.
Operating profit rose 9.3 per cent to 75.4 billion won. Sales rose 8.9 percent to 2.1 trillion won.
In the first six months to June Korean Air earned 4.14 trillion won, up 9.8 per cent from a year earlier. Revenue from international passenger flight services jumped 15.4 percent to 2.19 trillion won.
"More and more South Koreans are travelling overseas, helping our profitability, although the domestic service is a bit weaker due to intensified competition from rivals," a spokeswoman said.
Korean Air admitted fixing prices on international passenger and cargo flights and agreed to pay 300 million dollars in fines in the United States.
US-based brokerage Merrill Lynch described the penalty as "a major surprise," saying it is equivalent to six percent of Korean Air's market capitalisation.
"While it was known that the investigations were ongoing, a substantial fine was not expected by the industry, analysts or the market," it said in a statement.
Korean Air, with a fleet of 123 aircraft, is one of the world's top 20 airlines.
The company posted a quarterly net loss of 214.4 billion won ($232.5 million), reversing a year-earlier net profit of 14.9 billion won.
The fine was announced on Wednesday, but the airline said it had made provision in the second-quarter accounts for a penalty.
Operating profit rose 9.3 per cent to 75.4 billion won. Sales rose 8.9 percent to 2.1 trillion won.
In the first six months to June Korean Air earned 4.14 trillion won, up 9.8 per cent from a year earlier. Revenue from international passenger flight services jumped 15.4 percent to 2.19 trillion won.
"More and more South Koreans are travelling overseas, helping our profitability, although the domestic service is a bit weaker due to intensified competition from rivals," a spokeswoman said.
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Korean Air admitted fixing prices on international passenger and cargo flights and agreed to pay 300 million dollars in fines in the United States.
US-based brokerage Merrill Lynch described the penalty as "a major surprise," saying it is equivalent to six percent of Korean Air's market capitalisation.
"While it was known that the investigations were ongoing, a substantial fine was not expected by the industry, analysts or the market," it said in a statement.
Korean Air, with a fleet of 123 aircraft, is one of the world's top 20 airlines.
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