Korean Air reports $213m operating profit for 2020

Korean Air has reported a W238.3b ($213m) operating profit in 2020, 17% below 2019 levels, on the back of a strong cargo business and company-wide cost cutting efforts. Due to Covid-19, the sharp fall in passenger demand resulted in a 40% year-on-year decline in revenues to W7.4t, the flag carrier said discussing its tentative financial results that were disclosed at a same-day board meeting. Total operating expenses were down 40% year-on-year, reflecting the significant reduction in passenger capacity – passenger revenues plummeted 74% – as well as falling oil prices. Other operating costs such as facility fees and labour costs were likewise reduced. On the other hand, cargo sales increased 66%, supported by a 25% increase in freighter operations year-on-year and all 23 aircraft in its fleet being fully utilised, as well as the deployment of idle passenger capacity. Korean Air notes there was an increase in demand for Covid-19 diagnostic kits and automobile parts, while some cargo demand shifted from sea to air freight. During 2020, Korean Air raised W1.1t worth of capital by issuing new shares and from completing the sale of its in-flight catering and duty-free business units at W981.7b.<br/>