Korean Air has revealed a W56.6 billion ($46 million) first-quarter operating loss but says the “relatively mild” figure was mitigated by lower operating costs.

Revenue for the period fell 22.7% year on year, to W2.35 trillion, alongside a 14% decline in operating costs, among them lower fuel and payroll expenses.

Revenue passenger kilometres declined 29.5% “due to the drastic reduction of passenger demand across all routes”, which also lowered cargo capacity. Despite that, Korean reported a 3.1% increase in freight tonne kilometres, owing to increased cargo operations, improved load factors and the use of passenger jets as freighters.

Net loss widened to W692 billion for the period, from a loss of W89.4 billion in the first quarter of 2019. It cited W376 billion in foreign exchange losses as one of the factors that pushed it deeper into the red.

Korean is expecting further losses in the current quarter “due to the prolonged Covid-19 environment”. It expects the USA and some European countries to resume domestic travel and ease travel restrictions which will help mitigate its revenue losses, though it emphasises “absolutely safety and efficient aircraft operations”.

The airline sees further supply shortage in the cargo market throughout the second quarter due to the global reduction and suspension of passenger flights but views this as an opportunity.

“This capacity shortage will enable Korean Air to continue its profitable operations in its cargo business,” it says.