Jeju Air slips to Q2 loss as fuel costs wipe out gains

Jeju Air blamed “sudden changes in external environment” as it slipped into a W31.4b operating loss for Q2, driven primarily by higher fuel costs. By comparison, for the quarter ended June 2018 it reported a W11.9b operating profit. Operating revenue for the three months to the end of June was up by 9.9% to W311b ($257m), driven by an 8.7% growth in its passenger business segment. The carrier notes that passenger revenues from domestic and Japanese routes declined slightly, but it enjoyed 33% growth on China routes, while Southeast Asia expanded by 19%. Jeju’s ASKs rose by 28%, driven by international expansion, however RPK growth of just 17.5% saw load factor fall by 5.5 points to 85.3% Revenue growth was, however, wiped out by a 25% increase in cost of goods sold, driven by a 28% hike in the carrier's fuel costs. The carrier reported a net loss of W23.4b for the period, versus a W16.5b net profit over the previous corresponding period.<br/>