South Korea’s full-service carrier Asiana Airlines Inc. reported a disappointing fourth quarter earnings due to the weakening in local currency, but was able to end the year in its best performance in five years through cost-cutting efforts.
According to its regulatory filing on Friday, the nation’s second largest air carrier posted 40.8 billion won ($35.5 million) in operating profit on revenue of 1.49 trillion won in the October to December period last year, slightly underperforming the market expectations. It also recorded 116.1 billion won in net loss because the cheaper won translated into a loss of about 120 billion won.
Shares of Asiana Airlines closed Friday at 4,375 won, up 0.81 percent or 35 won from the previous session.
For full 2016, operating profit jumped 444.5 percent on year to 257 billion won on consolidated basis, largest in five years. The net account returned to the black at 54.3 billion won. Revenue increased 4.5 percent on year to 5.79 trillion won.
Its austerity endeavors helped the full-year balance sheet. The airliner sold its non-core asset Kumho Terminal for 270 billion won in April last year and streamlined flight routes.
The airline launched low-cost carrier Air Seoul in July last year to hand over money-losing routes, a move expected to boost its yearly operating profit by 6.4 billion won, according to market experts.
Passengers increased from Japan, South East Asia and Oceania on cheaper fares from subdued oil prices, an official from the company said. Cargo revenue also jumped on boom in Korean memory chip exports as IT components are mostly delivered by air.
The outlook for 2017 is however less rosy because of higher oil prices and increased volatility in foreign exchange rates.
By Kim Jung-hwan
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