Korean Air is expecting political and economical factors to depress passenger demand from key North Asian markets during the second quarter.
The airline said in an investor presentation that it expects inbound passenger demand from Japan and China to be affected by the weakening Japanese yen, and concerns of threats coming from North Korea.
However, it also expects outbound passenger demand from South Korea to increase from May.
On 31 March, it launched a daily Seoul Incheon-Tokyo Narita-Honolulu service, and intends to raise the frequencies of services to China, Japan and North America.
During the January-March period, it reported 1.1% growth in its international passenger yields to 9.3 cents, and 11% growth in domestic passenger yields to 19.8 cents.
On the cargo front, the carrier expects the launch of new IT products such as smartphones and the shipments of cherries to have a positive impact during the second quarter. This is despite a 12.7% decline in the first quarter freight traffic, as measured in freight tonnage kilometres. Yields for the quarter remained flat at 30.7 cents, compared with a year earlier.
Korean Air adds that it plans to cut cargo capacity on most routes, improve its efficiency through route consolidation and maximise the utilisation of passenger aircraft.
In the first quarter of 2013, Korean Air widened its net loss of won (W) 301 billion ($274 million) from W64.2 billion a year earlier. Operating revenue for the period ended 31 March declined by 2% to W2.94 billion.