May 18, 2020 11:55
Korea's two flag carriers suffered massive losses in the first quarter due to the global coronavirus lockdown.
Korean Air was W692 billion in the red and Asiana W549 billion (US$1=W1,231). Both carriers, which announced first-quarter earnings results on May 15, operated nearly empty flights for half the three-month period since the epidemic broke out in January, and their high foreign-currency debts exacerbated losses due to the weakening won.
Second-quarter earnings are expected to be even worse, because the coronavirus epidemic only really turned global after March.
Korean Air's sales fell 22.7 percent on-year to W2.35 trillion. The international flight business, which accounts for 94 percent of its passenger revenues, suffered an operating loss of W56.6 billion, compared to a profit of W238.4 billion in the first half of last year, as the operating rate fell to less than 20 percent.
Korea's largest carrier also saw a loss of W536.8 billion in foreign currency exchange amid the weakening won, leading to a net loss of W692 billion, up from W89.4 billion a year ago.
Asiana already suffered a W11.8 billion loss in the first quarter of 2019, and that widened in this first quarter to W208.2 billion.
Sales totaled a measly W1.13 trillion, down 21.5 percent compared to the same period of 2019, bringing the net loss to W549 billion. An Asiana staffer said, "Demand plunged sharply starting in February when countries around the world started limiting entry to Koreans and we were only to operate eight percent of planned international flights."
Low-cost carriers also suffered huge losses. T’way Air, Jin Air and Air Busan all posted losses of W21.9 billion, W31.3 billion and W38.5 billion, respectively. Jeju Air, the country's largest budget carrier, posted its worst-ever quarterly performance in the January-March period with a loss of W63.8 billion.
Industry insiders fear second-quarter results will be even worse. Korean Air and Asiana plan to increase flights to the U.S. and China next month, but the lockdown is showing little signs of easing soon.
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