With the oil prices continuing to hover around record low rates, it is widely expected to help the nation’s economy recover given its heavy dependence on oil imports.
Korean Air, the nation’s largest flag carrier, is one of the major companies expected to benefit from the oil trend and market analysts have a positive outlook on the carrier this year.
The company has already shown a profit boost in the fourth quarter last year largely due to the lower of jet fuel prices.
A visitor walks past a Korean Air advertisement at an exhibition in Goyang, Gyeonggi Province, Oct. 29, 2013. (Bloomberg)
The operating profit reached 152.9 billion won ($137.7 million) in the October-December period, compared with a profit of 17.8 billion won a year ago, the company said in a regulatory filing.
“A recovery in the global air cargo industry, in addition to falling oil prices and the company’s efforts to cut costs, helped the balance sheet to bounce back,” the company said.
Korean Air said it will strengthen its alliance with other air carriers in a bid to expand sales in the European and American market this year. For long-haul routes, it will focus on securing upper class passengers.
The air carrier is looking to adjust its air freight business depending on the demand and develop new profit sources such as high-value and time-sensitive products including medical supplies and fresh logistics.
It also plans to invest over $1.49 billion to add five new Boeing 777 freighters to its fleet starting in 2016.
By Park Han-na (hnpark@heraldcorp.com)
