Korean Air boosted its overall revenue in the second quarter of this year but saw its operating profit fall, as the strong recovery of passenger demand was offset by higher costs and a significantly weaker freight market. Outlining “tentative” results for the April-June period on 2 August, the SkyTeam carrier describes its operating profit of W468b ($361m) as “moderate”, having reported a W736b profit in the year-ago period. It cites “rising operation costs and airport fees” as being among the reasons for the declining profit. Its tentative net profit of W372 billion was down from W450b a year earlier. That was achieved on overall revenue some 6% higher year on year, at W3.5t, which was outpaced by an 18% rise in operating expenses. Within that Q2 revenue, Korean Air passenger income rose by more than 2.5 times to W2.2t from around W874b a year earlier, as it benefited from the removal of Covid-related travel restrictions in key markets. Cargo revenue more than halved year on year, however, to W964b from W2.17t in 2022. “The business has been affected by a decline in air freight demand due to increased passenger belly cargo capacity following the strong rebound of passenger operations, as well as a drop in cargo rates,” Korean Air states. Passenger revenue is further improving in the seasonally strong third quarter of the year, Korean Air says, as demand continues to recover from the pandemic. But it also cites a declining freight outlook amid weakening rates and demand, exacerbated by the global economic slowdown. Korean Air was a rare example of an airline that maintained profitability during much of the pandemic, as it benefited from high demand for air cargo while capacity was constrained, offsetting a huge fall in passenger revenue. The airline ended Q2 with 156 aircraft in its fleet, versus 155 a year earlier.<br/>
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Indonesian carrier Garuda swung to operating loss of $110 million in the first six months of 2023, despite a surge in revenue. The operating loss for the 6 months to 30 June contrasts sharply with its operating profit of $4b a year earlier, which stemmed from one-off items related to its debt restructuring exercise. The carrier also swung to a net loss of $76m from a net profit of $3.8b a year earlier, according to its half-year earnings report. Garuda did not provide an analysis of its performance, but carrier CE Irfan Setiapura recently told FlightGlobal that the carrier is set on returning to profitability. Key focus areas include simplifying the airline’s fleet, improving the passenger experience, partnerships, and working with creditors. Cash and cash equivalents as of 30 June stood at $428m, an improvement over $131m a year earlier. Garuda’s interim results statement also offered some details about the carrier’s longer term fleet plans. The carrier has orders for nine A330-900s with deliveries to run from 2026-31. Garuda has conversion rights to switch these to A350s or A350Fs. Four A330-800s are set for delivery from 2027-30, but Garuda can cancel these for $1m per aircraft. In a statement issued after its shareholders meeting in May, the Jakarta-based airline says it expects to operate a fleet of 63 aircraft by end-2023, a downward revision against the more than 70 aircraft it forecast at the start of the year.<br/>