South Korea: Budget carriers' earnings take off in Q1

Budget carriers in South Korea saw their earnings more than double in the first quarter thanks mainly to their efforts to diversify air routes, data showed Wednesday. According to the data from industry sources, brokerages and the government, the combined operating profit of six low-cost carriers spiked 131% on-year to 186.1b won ($171m) in the January-March period. The low-fare airlines registered total sales of 1.18t won during the three-month period, up 34.2% from the same period last year. Their stellar performance came despite still weak demand for their Chinese routes in the wake of China's retaliation against South Korea for its installation of an advanced US missile defense system. In a bid to counter the fallout, the budget carriers stepped up efforts to diversify routes to Japan and Southeast Asia, market watchers said. Also responsible was the continued strength of the South Korean currency against the dollar, which helped ease their burden of servicing foreign debt, they added.<br/>