Korean Air Q2 profit falls 34% on higher fuel costs, revenue hits record high

HONG KONG, July 13 (Reuters) – Korean Air Lines reported a 34% drop in second-quarter operating profit on Monday, as surging fuel costs weighed on earnings despite the carrier posting record revenue for the quarter.

• The South Korean flag carrier said operating profit for the April-June period fell to 261.8 billion won ($174.52 million) from 398.9 billion won a year earlier.

• Revenue climbed to a 5.02 trillion won, up 26% year-on-year, a record for the second quarter.

• Passenger revenue rose about 19% year-on-year to 2.85 trillion won in the second quarter.

• Stronger inbound tourism and rising transit demand, partly fuelled by geopolitical disruptions in the Middle East, helped offset a softening in outbound travel from South Korea amid higher oil prices.

• Cargo revenue surged about 46% year-on-year to 1.54 trillion won, driven by robust demand tied to global artificial intelligence investments and strong exports of South Korean beauty products.

• Korean Air said it expected passenger demand to rebound in the third quarter, buoyed by peak summer travel and lower fuel surcharges, while targeting high-growth cargo segments, particularly AI-related industries, to sustain revenue momentum.

($1 = 1,500.1000 won)

(Reporting by Julie Zhu; Editing by Jamie Freed)