South Korea’s largest full-service carrier Korean Air Lines Co. reported a 13 percent on-year gain in operating profit in the third quarter as a rise in demand for long-haul travels has more than offset increased expenses from higher fuel cost and the stronger U.S. dollar.

Korean Air Lines announced in a regulatory filing on Tuesday that it raised 401.8 billion won ($354.5 million) in operating income on a consolidated basis for the July-September period, up 13 percent from a year ago. Net profit more than quadrupled to 257.3 billion won on sales of 3.5 trillion won, up 9.5 percent, during the same period.

On an individual basis, its third-quarter operating profit rose 3.7 percent to 392.8 billion won, net profit more than tripled to 267.8 billion won, and sales up 9.1 percent to 3.4 trillion won.

Shares of Korean Air finished 0.85 percent higher on Tuesday at 29,700 won.

The company attributed the strong earnings to an increase in long-haul travels, in particular in the China-Korea and Japan-Korea routes. Its joint venture with the world’s largest carrier Delta Air Lines Inc., which was launched in May, has also added new transferring passengers and high-end travel demand, the company said.

Korean Air Lines launched the joint venture with Delta Air Lines to jointly operate Asia-Pacific routes connecting 290 cities of the Americas and 80 cities in Asia. The Korean Air-Delta Air joint operations allow passengers of both airlines to use multiple routes in the U.S.

The Korean flag carrier managed to report an operating profit for a 13th consecutive quarter in the third quarter since the third quarter of 2015 despite the worsening external business environment from the rising international oil prices that have hiked fuel costs and the weaker Korean won against the U.S. dollar. The weaker local currency generally adds burden on local airlines that have large foreign currency-denominated debts. Its smaller peer Asiana Airlines saw drop in its third-quarter operating profit from a year ago due to higher oil prices and the stronger greenback.

Korean Air Lines’ revenue passenger kilometer (RPK) that measures flight traffic jumped 13 percent for China routes, 9 percent for Europe routes, and 1 percent for Southeast Asia routes. The total number of passengers also jumped 1 percent in the third quarter from a year earlier.

Korean Air’s freight tonne kilometers (FTK) that measures actual cargo traffic fell slightly from last year but its yield per unit jumped by more than 10 percent.

Korean Air Lines said it will put out efforts in the fourth quarter to continue to maximize benefits from its joint partnership with Delta Air Lines in the Pacific routes to increase revenue of passenger business. The company also plans to boost profitability by adding more routes and flights such as the Busan-Danang route launched last month.

It also expects a rise in cargo revenue on the back of increased demand during the year-end season with Thanksgiving and Christmas holidays.

By Hwang Soon-min and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]