South Korea’s second-largest full-service carrier Asiana Airlines Inc. saw its operating profit in the second quarter drop 11.2 percent on year due to rising oil prices but reported a 10.1 percent jump in revenue on increased demand for its broadened flight services.
The Korean airliner said in its regulatory filing on Wednesday it posted an operating profit of 38 billion won ($33.9 million) on a consolidated basis in the April-June period, down 11.2 percent from a year earlier and 40.9 percent from the previous three months.
Revenue beat market consensus to reach 1.64 trillion won, up 10.1 percent on year and 2.5 percent on quarter, its best-ever second quarter record.
On Thursday, shares of Asiana Airlines gained 2.63 percent to close the day at 4,300 won.
The company said its bottom line took a hit primarily from increased fuel costs, which surged 100 billion won in the second quarter to push up operating costs by 12 percent from the year-ago period.
But top-line growth stayed strong, thanks to a sharp rise in passenger flights to Europe and the U.S., where sales growth gained more than 10 percentage points on year. This was mostly driven by the new flight services introduced in May, including daily flights to all of its U.S. destinations and the addition of a new direct flight to Venice, Italy.
The airline plans to launch a new non-stop flight to Barcelona, Spain on Aug. 30. It also aims to bump up its long-haul routes so that they make up 60 percent of all its flights by 2022.
Air cargo operations also grew across the board to drive up total revenue by 6 percent from the previous year.
The company said it also cut its debt in the first six months of the year to 3.61 trillion won from 4.06 trillion won in the same period a year ago. This was helped by the 412.0 billion won in operating cash flow and 400.9 billion won generated from sales of non-core assets, including the headquarters building of its parent company Kumho Asiana Group in central Seoul and its stake in CJ Logistics Corp.
“We plan to stabilize our finances by further lowering our debt to 3.2 billion won by the year end and reducing the short-term debt ratio to 30 percent,” said an official from Asiana Airlines.
By Moon Ji-woong and Kim Hyo-jin
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