Korean Air Losses Jump on Weak Won

 

Korean Air Lines Co. said Thursday its first quarter net loss widened as weakness in the South Korean won drove up costs denominated in dollars.

Korean Air lost 526.3 billion won ($413 million) in the three months ended March 31, the company said in a statement. Korean Air posted a net loss of 325.5 billion won a year earlier.

The result marked the sixth straight quarterly loss for South Korea’s largest airline. Among passenger airlines, Korean Air is also the world’s biggest carrier of international commercial cargo.

Korean Air spokeswoman Lee Ji-hye said that weakness in the South Korean won hit the company’s bottom line by increasing costs it has in dollars, such as servicing its foreign debt and paying for fuel.

The South Korean currency traded 32 percent lower against the dollar on average in the first quarter of 2009 compared with the same period last year, according to Bank of Korea data.

Korean Air booked a foreign exchange loss of 614.9 billion won, 62.9 percent higher than in the first quarter last year, the statement said.

The airline’s borrowings denominated in dollars, which account for the overwhelming majority of its foreign debt, totaled $4.72 billion as of March 31, the statement said.

Korean Air’s sales during the quarter were flat at 2.26 trillion won from the year before.

Shares in Korean Air, which released earnings results after the stock market opened, fell 0.6 percent to 41,600 won at around midday.

5/6/2009 11:24 PM SEOUL, South Korea (AP)