Korean Air expecting improved operating profit in 2010, after 33-fold increase in 1Q2010 profits

Korean Air CFO, Lee Sang-kyoon, stated the carrier expects to report an operating profit of KRW1 trillion (USD890 million) in 2010, if current trends continue (Reuters/Bloomberg, 14-Apr-2010). The company officially targets a KRW800 billion (USD716 million) operating profit in 2010, on revenues of KRW10.6 trillion (USD9.5 billion). The carrier added that 1Q2010 operating profit surged more than 33-fold to KRW220.2 billion (USD197 million), as economic recovery boosted travel demand. (The South Korean economy is expected to grow at its fastest pace in more than seven years in 2010, with 1Q2010 growth estimated at 7.5%, according to the Bank of Korea). The carrier commented that a 2.9% appreciation of the Korean Won reduced US dollar-denominated payments and the value of the airline's approximately USD5 billion debt. It reported foreign exchange gains of KRW155.2 billion (USD139 million) in the quarter (compared to a KRW566.7 billion loss in 1Q2009). The carrier added that international passenger traffic increased 14% and cargo traffic gained 21% year-on-year, with an 8.5 ppt increase in passenger load factors to 77% and a 0.5 ppt cargo load factor improvement to 77.1%