Korean Air posts 2011 net loss on higher fuel expenses

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South Korean flag carrier Korean Air posted an operating profit of won (W) 394 billion ($349 million) and operating revenue of W11.8 trillion in 2011.

However, the airline posted a net loss for the 12 months ended 31 December 2011 because of a surge in jet fuel expenses.

For the fourth quarter of 2011, the carrier posted a net profit of W125 billion and an operating revenue of W3.1 trillion. In comparison, the airline posted a net loss in the same period a year earlier.

Operating profit for the three months ended 31 December 2011 amounted to W76.8 billion, the airline said in a statement.

International passenger and cargo businesses remained the major revenue contributors for the airline in the fourth quarter of 2011, accounting for 55.1% and 29.3% of the operating revenue, respectively.

International passenger traffic during the fourth quarter increased by 10.2%, while capacity, as measured in ASKs, increased by 10.6%.

Cargo traffic fell 6.7% during the fourth quarter because of a decline in both outbound traffic and transit traffic of 10% and 4%, respectively.

Looking ahead, the airline expects passenger traffic to continue on an uptrend, citing IATA's prediction of a 5.2% growth for international air traffic in 2012.

Similarly, Korean Air expects cargo traffic to rise steadily because of the Free Trade Agreement between Europe and Korea as well as The London Olympic Games.