Improved Passenger and Cargo Sector Results for Korean Air

Korean Air has reported considerable increases in both its passenger and cargo business during the first quarter of 2004. Total cargo traffic surged by 20.6%, up from 1,597 million FTK to 1,926 million FTK. Meanwhile, total passenger traffic grew from 10,125 million RPK to 10,786 million RPK, representing a 6.5% rise compared with the corresponding period of last year. The results reflect substantial growth in demand in both sectors, as well as a brighter business outlook in 2004. This positive trend was especially apparent in outstanding March figures for both sectors.

Passenger Business

Improved market conditions and a more favourable economic situation increased demand for air travel, fuelling a sizeable increase in Korean Air’s passenger business. Total traffic rose by 11.6% and number of passengers grew by 3.4% compared to the same period while the load factor also rose to 67.4%, 3.4% point up from the last year’s figure. Korean Air’s overall international passenger traffic in March was exceptionally good, reaching a figure of 2,976 million RPK – 13.1% up on the corresponding period of last year. Traffic on European / Middle East routes also expanded by 17.9% on a year-on-year basis. Traffic on North America, Southeast Asia and Japan routes likewise performed well, with respective increases of 14.5%, 14.4% and 12.4%.

Cargo Business

In March, total traffic increased by 18.2%, the load factor by 0.7% point, and carried tons by 11.4%, all on a year-on-year basis. Traffic on China and European / Middle East routes experienced particularly vigorous growth, with year-on-year hikes of 55.1% and 32.3%, respectively. Domestic business likewise remained strong. These enhanced traffic and yield levels are expected to have a strong positive impact on the airline’s profitability.

Robust Demand as Industry Rebounds

Announcing the figures, Korean Air said, “These results are very encouraging. They not only reflect the industry’s recovery, but also demonstrate stronger demand for Korean Air’s quality passenger and cargo services. We’re sure that we will achieve this year’s goal: revenue of over KRW 6.8 trillion with operating profit in excess of KRW 680 billion.”