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소아쌤

Budget carriers' earnings take off in Q1

By Yonhap

Published : May 23, 2018 - 09:57

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Budget carriers in South Korea saw their earnings more than double in the first quarter thanks mainly to their efforts to diversify air routes, data showed Wednesday.

According to the data from industry sources, brokerages and the government, the combined operating profit of six low-cost carriers spiked 131 percent on-year to 186.1 billion won ($171 million) in the January-March period.

The low-fare airlines registered total sales of 1.18 trillion won during the three-month period, up 34.2 percent from the same period last year.

Their stellar performance came despite still weak demand for their Chinese routes in the wake of China's retaliation against South Korea for its installation of an advanced US missile defense system.

In a bid to counter the fallout, the budget carriers stepped up efforts to diversify routes to Japan and Southeast Asia, market watchers said.


Yonhap Yonhap

Also responsible was the continued strength of the South Korean currency against the dollar, which helped ease their burden of servicing foreign debt, they added.

Leading budget carrier Jeju Air Co. was the top performer in the first quarter, with its sales jumping 29 percent on-year to 308.6 billion won and operating income shooting up 71 percent to 46.4 billion won.

The combined first-quarter operating income of the six budget carriers even exceeded that of top full-service carrier Korean Air Lines Co. In the first quarter, Korean Air's operating income dropped 4.3 percent on-year to 176.8 billion won, with its top line climbing 7.4 percent to 3.02 trillion won.

Smaller rival Asiana Airlines Inc. saw its first-quarter operating income surge 145 percent on-year to 64.3 billion won, with sales rising 10 percent to 1.6 trillion won.

Industry watchers said soaring international oil prices will continue to come as a challenge to the local aviation industry in the second quarter. (Yonhap)

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