Korean Air ends year with $213 million operating profit
While most of the airlines report huge losses amid COVID-19 pandemic, the biggest South Korean air carrier Korean Air reported an operating profit in 2020.
Despite ending the year with a net loss, Korean Air announced it navigated through the COVID-19 crisis with an operating profit of 238.3 billion won ($213 million) on February 4, 2021.
Following the financial report, Korean Air had significantly reduced a net loss from 568.7 billion won ($508 million) in 2019 to 228.2 billion won ($203 million) in 2020. As for the airline's overall sales in 2020, they decreased by 40%. In particular, passenger ticket sales fell by 74%, as compared to the previous year.
However, the cargo business enhancement tipped the balance and made operating profit possible, as the airline fully utilized its fleet of 23 freighter aircraft and increased cargo capacity by 25% compared to 2019. The airline also used idle passenger planes for 4,500 cargo operations.
Additionally, Korean Air said it had plans to reinforce its cargo business strategy by proactively responding to changes in the market. For example, the airlines will focus on its vaccine transportation task force and start shipping COVID-19 vaccines in the second quarter of 2021.
Furthermore, Korean Air is still focused on Asiana Airlines takeover. In January 2021, the airline announced plans to sell $3 billion-worth of new shares to finance the acquisition of the cash-strapped Asiana.
On January 14, 2021, the South Korean Fair Trade Commission (FTC) and other foreign antitrust regulators received a business combination report from Korean Air regarding the acquisition of Asiana Airlines.
The business combination review is still under examination. If the business combination report is approved, Korean Air would be able to officially begin the process of acquiring Asiana Airlines.
“The main reason behind Korean Air's decision to acquire Asiana Airlines at this time is to stabilize the Korean aviation industry, which is suffering from the Covid-19 pandemic,” a Korean Air spokesperson said in a statement.
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