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KAL posts massive increase in Q4 profit

Korean Air (KAL) posted a 581% growth in profit for its fourth fiscal quarter, driven by a surge in cargo and a recovery in international passenger traffic.

Profit for the quarter ending 31 December 2009 was 154 billion won ($134 million), up from 22.6 billion won in the corresponding quarter a year ago, says KAL.

Operating revenue held steady at 2.6 trillion won "in spite of a challenging operating environment for the aviation industry", says the airline.

It posted a net income of 122.3 billion won, compared with a loss of 644 billion won a year ago.

Total operating expenses fell 9.9% to 2.4 trillion won, it says.

"Lower fuel prices and a stronger won have helped reduce the airline's operating expenses."

In terms of international passenger traffic, RPKs rose 11.3% while capacity, as measured in ASKs, grew 6.5%.

On the cargo front, total FTKs increased 15.2%, says the airline.

"The cargo business has picked up in September 2009 and reached new heights in the fourth quarter of 2009," it adds.

"The increased cargo traffic coincided with the usual busy season for the cargo business ahead of festivities such as Thanksgiving and Christmas, while a recovery in consumer spending worldwide also fuelled the growth in this segment," says the carrier.

KAL expects to receive seven more aircraft this year, and another 15 in 2011.

It has 57 aircraft on order, including 10 Airbus A380s and 10 Boeing 787s, says Flightglobal's database ACAS.

"Total investment amount in fleet purchase, upgrade and refurbishment will increase by over 50% in 2010," says the carrier.

It also expects further growth in the cargo sector. "With the turnaround in cargo demand and the pick up of exports volume, the airline expects that this business segment will be the growth driver again in 2010 and revenue generated will reach another peak," says the airline.

It will continue stringent cost controls and network expansion this year, it adds.

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