South Korea’s second-largest full-service carrier Asiana Airlines Inc. reported its biggest-ever quarterly profit and sales in the fourth quarter thanks to the addition of long-haul flights to diversified routes and a rise in information technology (IT) cargo.
Asiana Airlines said in a regulatory filing on Wednesday that it posted an operating profit of 86 billion won ($79.2 million) on a consolidated basis in the October-December period, more than doubled from a year ago. Sales also increased 12.8 percent to 1.65 trillion won in the same period. Both operating income and sales are the biggest quarterly figures since its inception, the company said.
Despite strong results, shares of Asiana Airlines ended 4,970 won on Wednesday, down 4.42 percent or 230 won from the previous session.
For full 2017, Asiana Airlines’ operating profit increased 6.7 percent to 273.6 billion won from a year ago. Net profit also gained 324.8 percent to 223.3 billion won over the same period, while sales reached 6.2 trillion won, up 8.1 percent on year. The company’s sales and operating income are also record high annual figures since 2011.
The company said in a statement that it reported strong results because the addition and diversification of long-haul flights helped offset weak demand from China that banned group tours to Korea in protest against Korea’s host of a U.S. antimissile system.
Last year, Asiana Airlines focused more on domestic flights and long-haul flights to Europe, the Americas, and Oceania. To cope with diversified long-haul flights, it introduced A380 and A350 passenger aircrafts.
The company’s cargo revenue also surged last year amid a boom in exports of Korean IT products such as liquid crystal displays, smartphones, and chips, as well as high-value added products such as bio and fresh groceries that are mainly transported by plane.
A sharp rise in outbound travel during the unusually long Chuseok holiday in early October also helped boost its earnings in the last three months of last year, Asiana Airlines said.
The company plans to further diversify its long-haul routes by launching regular flights to Venice, Italy, in May and Barcelona, Spain, in August. It also plans to strengthen competitiveness of its mid- and long-haul flights by introducing next-generation A350 aircraft to the routes flying daily to San Francisco, London, Hanoi and Fukuoka.
At an event commemorating its 30th anniversary on Tuesday, Kim Soo-cheon, president and chief executive, said the carrier will focus on long-haul routes and have them account for more than 60 percent of its flights in the long term.
To improve profitability and further increase sales, Asiana Airlines will seek to attract IT-related cargo demand of emerging countries such as India and Vietnam, the company official said.
By Moon Ji-woong and Lee Eun-joo
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