Korean Air Lines said on the 13th that its preliminary operating profit on a separate basis for the first quarter rose 47.3% from a year earlier to 516.9 billion won.
Revenue for the same period increased 14.1% to 4.5151 trillion won, and net profit was preliminarily tallied at 242.7 billion won, up 25.6%.
Korean Air Lines' first-quarter passenger business revenue rose 7.3% on-year to 2.6131 trillion won, while cargo business revenue increased 3.5% to 1.0906 trillion won.
Korean Air Lines said passenger business results improved as sales centered on Europe and major transfer routes increased from a year earlier, supported by solid demand tied to the Lunar New Year holiday in Feb.
First-quarter revenue on European routes increased 18% on-year, driving the improvement. Korean Air Lines said demand for nonstop flights to Europe and major transfer routes rose due to the impact of the war between the United States and Israel and Iran.
Routes to China, where passenger numbers have been increasing since visa exemptions were applied to Chinese group tourists last year, also had a positive effect. First-quarter passenger revenue on China routes rose 19% from a year earlier.
Japan routes also continued to see strong demand, with first-quarter revenue up 12% on-year. In addition, North America routes (4%), Oceania routes (9%), and domestic routes (4%) all posted increases in passenger revenue.
This is seen as the result of Korean Air Lines significantly raising its load factor (L/F) by streamlining route operations. The airline's L/F for the first quarter was 88.4%, up 3.5 percentage points from the same period last year.
Korean Air Lines also appeared to have not felt the impact of soaring fuel costs through the first quarter. Jet fuel began to surge from last month amid instability in the Middle East, averaging $194 per Barrel. That is more than double the airline's business-plan benchmark price of 220 cents per gallon ($92.4 per Barrel).
However, Korean Air Lines' first-quarter fuel expenditure was 1.0795 trillion won, down 0.1% from a year earlier. Efforts such as hedging through forward contract purchases and optimizing operations to reduce usage were said to have played a role.
Korean Air Lines added that in the second quarter, the passenger business is expected to fully feel the effects of high oil prices and a strong dollar stemming from Middle East instability, and that it switched to an emergency management system starting in April to prepare for a surge in expense due to rising international oil prices.
It said the cargo business expanded fixed-volume contracts and increased revenue by operating routes flexibly, including adding extra sections and charters on North America routes where demand is strong.
Korean Air Lines plans to focus on attracting overseas departure and transfer demand to defend profitability in preparation for stagnant Korea-origin demand, and to secure profitability in cargo by preempting seasonal cargo volumes, attracting demand from growth industries, and operating routes flexibly.