Korean Air Posts Surprise Second Quarter Net Loss on Fines
Korean Air, South Korea's top airline, posted an unexpected quarterly net loss on Thursday after it booked $300 million in fines for its role in conspiring to fix flight prices.
Korean Air, the world's top air cargo carrier, swung to a 214.4 billion won (US$231.8 million) net loss in the second quarter ended June 30, from a 14.9 billion won profit a year earlier.
That widely missed an average 55.3 billion won profit forecast from Reuters Estimates.
The U.S. Justice Department said on Wednesday that British Airways and Korean Air have agreed to plead guilty and pay separate $300 million criminal fines for their roles in conspiracies to fix prices of passenger and cargo flights.
Korean Air said its operating profit rose 9% to 75.4 billion won as international passenger traffic grew and jet fuel costs dropped, but the rise also fell short of expectations.
Korean Air is expected to benefit in the second half from soaring travel demand and a rising won, which cuts the cost of importing fuel and servicing dollar-denominated debt. But rising oil prices and competition from Chinese airlines remain a worry.
Shares in Korean Air, with a market value of $5.4 billion, jumped 43% in the second quarter, outperforming a 20% rise in the KOSPI.