Korean Air's Q2 operating profit drops 34% despite record revenue as fuel costs take a bite

Korean Air's operating profit dropped 34 percent to 261.8 billion won ($175 million) in the second quarter despite revenue hitting a new high as rising oil prices drove up fuel costs.

The operating profit still beats the market consensus of 62.4 billion won compiled by market tracker FnGuide.

Revenue came in at 5 trillion won during the April-to-June period, up 26 percent on year, according to the preliminary earnings report from Korea's biggest airline. It also beats analyst estimates of 4.8 trillion won.

Despite doing better than expected, the flag carrier swung to a net loss of 97.3 billion won. 

The airline’s passenger business revenue reached 2.85 trillion won, up 18.8 percent from a year earlier, thanks to growing transit demand through the Middle East and a rebound in inbound visitors. Korean Air's expanded capacity on key routes further enhanced profitability.

The cargo business reported 1.54 trillion won, up 46.1 percent on year, with demand buoyed by expanding AI-related investments and robust Korean beauty products exports.

Korean Air expects passenger demand to recover in the third quarter on the back of lower fuel surcharges during the summer travel season.

BY SARAH CHEA   [[email protected]]