Mods -- I'm sorry if this isn't the right place for this, but I thought it was another interesting news item to share. Please move it or redirect me if it shouldn't be here! Thanks!
peace,
~Ben~
Profit declines 61% at Korean Air Lines By Kyunghee Park
Bloomberg News
Thursday, January 26, 2006
SEOUL Korean Air Lines said Thursday that its profit last year fell 61 percent, citing a surge in fuel prices and a three-day strike by its pilots in December.
Net income fell to 202.3 billion won, or $209 million, last year, from 519.5 billion won in 2004, the airline said in a statement to the Korea stock exchange. Sales rose 5.2 percent to 7.58 trillion won.
Korean Air, Singapore Airlines and other carriers have been levying surcharges and hedging their fuel needs as they struggle to reduce the effect of higher oil prices. Fuel accounted for 28 percent of Korean Air's expenses in the first nine months of last year. The strike probably caused the airline 50 billion won in sales, the government said in December.
Operating profit, or sales minus expenses and the cost of goods sold, rose 13 percent to 432.2 billion won last year, the carrier said.
The airline said in August that it planned to hedge 1.8 million barrels of fuel from June to November, or about 300,000 barrels every month.
A three-day strike by Korean Air pilots in December undermined the airline's profit. The South Korean government on Dec. 12 ordered the pilots, who were seeking higher wages, to end the strike to prevent further damage to the economy.
Gains from nonoperating items, which include interest and foreign-currency exchange, fell 62 percent to 365.2 billion won last year. Korean Air's foreign debt declines by 48 billion won for every 10 won gain against the dollar.
Korean national account surplus narrows
South Korea's current account surplus narrowed to $541.6 million in December, the smallest in four months, as global crude prices raised the cost of importing oil.
The surplus compared with $2.2 billion in December 2004 and a revised $2.2 billion in November, the Bank of Korea said. The current account is the broadest measure of trade because it covers the flow of goods, services and money across borders.
For all of 2005, South Korea posted a current account surplus of $16.6 billion.
