Korean Air swings to net loss in 2011

SEOUL: Flag carrier Korean Air said Tuesday it swung to a net loss last year because of higher fuel costs, lower cargo demand and a weaker local currency.

For the whole of 2011, the airline said it recorded a consolidated net loss of 98.2 billion won ($87 million) compared with a net profit of 623.9 billion a year earlier.

Sales were up 5.4 percent to 12.27 trillion won while operating profit plunged 62.8 percent to 459.8 billion won.

Operating expenses rose 14 percent to 11.807 trillion won last year as jet fuel prices increased to an average of $126 a barrel compared with $121 a barrel in 2010.

This year the airline set higher business targets, citing less volatile exchange rates and fuel prices.

Korean Air -- the world's second-largest cargo carrier by volume after Cathay Pacific -- also expects increased shipments thanks to the London Olympic Games and South Korea's new free-trade agreement with Europe.

Korean Air said its fourth-quarter net profit jumped to 146.1 billion won from 24.4 billion won a year earlier due to foreign exchange gains.

Operating profit fell 35 percent to 76.6 billion won, while sales rose 8.5 percent to 3.19 trillion won.

Copyright AFP (Agence France-Presse), 2012