The Korean Won's weakness against the dollar widened the losses for the already indebted carrier.
The losses for the already indebted carrier were made worse by the weaker Korean Won relative to the dollar.
Asiana Airlines, the second-largest airline in South Korea, announced a pretty devastating first-quarter loss today as the weaker won increased the company's operational costs and widened net losses. Additionally, despite its best efforts, Asiana Airlines is still battling to overcome the obstacles standing in the way of its merger with Korean Air.
Losses widened by the weakened Wo
The Star Alliance member reported an operational profit of over KRW166.82 billion ($124.59 million) for the first quarter of this year, which was a notable 16% rise from the KRW143.52 billion ($107.19 million) reported for the first quarter of previous year. Sales for the airline totaled an expected KRW1.75 trillion ($1.31 billion), a 40% increase over KRW1.25 trillion ($933.56 million) from the previous year.
Although profits and sales were up, Asiana Airlines' net losses increased this quarter to almost KRW54.36 billion ($40.6 million), a significant increase from the KRW46.55 billion ($34.8 million) reported for the March-ending quarter last year. The airline claimed that operating costs had increased as a result of the local currency's depreciation against the US dollar.
The dollar's sharp increase from KRW1,204.95 to KRW1,275.58 on average in the first quarter of this year caused the airline to struggle to make ends meet due to fluctuating fuel prices, among other things. Asiana Airlines said in a statement
"The Korean Won's weakness against the dollar pushed up jet fuel prices, maintenance, and other airport-related costs. All these weighed heavily on our quarterly bottom line."
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