South Korean airliners are crashing down amid hiatus in travel business due to spread of the China-originated novel coronavirus (COVID-19) that can further wreck their bottom line that bore the burn from consumer boycott in visits to Japan.
The country’s largest LCC Jeju Air Co. in its regulatory filing on Tuesday said it incurred an operating loss of 45.06 billion won ($38.2 million) in the quarter ended December, shriveling 159.5 percent from three months ago and reversing from a profit of 5.4 billion won a year earlier.
Its net loss narrowed 44.9 percent on quarter but widened 18.8 percent on year to 16.6 billion won, while sales slid 16.1 percent and 2.5 percent, respectively, to total 309.4 billion won during the period.
For the full 2019, Jeju Air swung to an operating loss of 32.89 billion won due largely to reduced travel demand on short-haul routes amid nationwide consumer boycott against Japanese goods and trips to the country and turbulence in Hong Kong.
It logged a net loss of 34.1 billion won for the year, and sales added 9.9 percent on year to 1.38 trillion won.
National flag carrier Korean Air Lines Co. (KAL) disclosed its operating profit for full 2019 retreated 56.4 percent to 290.9 billion won. Net loss snowballed to 570.8 billion won from 107.4 billion won a year ago, while sales contracted 2.8 percent to 12.3 trillion won.
Another leading budget carrier Jin Air Co. under Korean Air Lines posted an operating loss of 49.15 billion won last year, reversing from a profit of 62.98 billion won in 2018. It also swung to a net loss of 54.24 billion won, with sales down 9.9 percent to 910.16 trillion won.
T’way Air, Korea’s third largest budget name, reversed to an operating loss of 19.23 billion won despite highest-ever revenue of 810.4 trillion won, up 10.7 percent on year.
Others also would done equally poor.
Their outlook is equally murky as the spread of a new deadly epidemic has led to a voluntary cutback or shutdown of services to China, on which domestic carriers rely much of their revenue.
“Markets expected business recovery on renewed hopes for easing in trade tensions between the U.S. and China, but the recent virus scare has made matters worse,” said an industry source.
By Song Gwang-sup and Lee Ha-yeon
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