Airline Finance News - Asia / Pacific

AirGuide Business, May 5, 2008

Korean Air Lines

Korean Air, the world's largest air cargo carrier, reported a KRW325.5 billion won (USD$324.3 million) net loss, in the first quarter ended on March 31. That compared with a KRW130.8 billion profit a year ago and a revised KRW35.3 billion loss in the fourth quarter of 2007. January-March operating profit stood at KRW19.6 billion. That was far below a KRW151.4 billion profit a year earlier and a KRW128.6 billion profit in the last quarter of 2007. Korean Air used 1.3 percent more fuel in the first quarter from a year earlier, while fuel costs, the company's single-biggest cost item making up 30 percent of its operating expenses, jumped 49 percent. Apr 30, 2008

Korean Air Lines

To cope with record high oil prices Korean Air is also seeking to raise fuel surcharges and air fares, which a company official said both need government approvals. But Korean Air could be fighting a losing battle to swing back into the black, analysts say, as a weaker won may boost fuel costs even further. The won's value against the dollar at the end of the first quarter was 5 percent lower than a year earlier and 5.5 percent lower than the end of the fourth quarter. A softer won also bolsters the costs of servicing foreign currency-dominated debts; Korean Air had USD$4.9 billion in dollar debt and JPY430 million yen (USD$4.13 million) in yen debt as of the end of the first quarter. The debt mainly relates to aircraft purchasing and leasing. The weaker currency may also impact demand for overseas trips as South Korean travelers tighten their belts. Apr 30, 2008

Qantas Airways

Qantas is raising fares on tickets sold from 9 May, and its CEO Geoff Dixon admitted yesterday that [sup.3]if high fuel prices persist beyond this point it would be of increasing concern.[sup.2] Its domestic fares rise by around 3.5% and international ones by 3%. On the plus side, the company said it has hedged 34% of its 2008/09 fuel needs at $90 a barrel. Apr 29, 2008

Qantas Airways

Qantas will suspend a share buyback plan and increase airfares to protect its profitability as fuel prices continue to climb. The carrier has hedged 34% its 2008-09 fuel needs at $90 per barrel, the majority in the first half of its fiscal year. A further rise in fuel prices is the reason for suspension of the share buyback initiative. It will increase both domestic and international fares sold in Australia from May 9. Domestic fares will rise by approximately 3.5% and international by about 3%. He added that the group's low-cost subsidiary Jetstar Airways is reviewing fare levels. Apr 29, 2008

Qantas Airways

Qantas said it had hedged 34 percent of its fuel needs at USD$90 a barrel for benchmark crude oil, mostly for the first half of the 2008/09 fiscal year. "But if high fuel prices persist beyond this point it would be of increasing concern," Qantas Chief Executive Geoff Dixon said in a statement. Oil futures hit a record just short of USD$120 a barrel on Monday on supply fears and tensions between the United States and Iran. Apr 28, 2008