Air Busan Reports 35.5 Billion Won Operating Loss in Q2 Amid Deteriorating External Business Conditions
Revenue Increases, But Net Profit Turns to Loss
"Focusing on Improving Profitability in the Second Half Through Cost Management"
Air Busan achieved sales growth in the second quarter, but operating profit plummeted due to adverse external business conditions, including high oil prices and a strong exchange rate.
On July 27, Air Busan announced that it recorded an operating loss of 3.55 billion won in the second quarter. This represents a 219% decline compared to the same period last year.
Second-quarter revenue reached 235.3 billion won, a 37% increase from 171.4 billion won in the second quarter of last year. However, profitability weakened due to the burden of fuel costs and foreign exchange losses. Net profit, which stood at 27.7 billion won in the first quarter, also shifted to a net loss.
Air Busan plans to improve profitability in the third quarter by operating flexibly and increasing supply capacity to meet peak summer travel demand, as well as by expanding charter flights centered on short-haul routes to Japan and China.
In addition, the company will steadily prepare to launch service on the Busan–Guangzhou route within this year—having already secured transport rights—in order to improve transportation convenience for local residents and diversify its route portfolio.
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An Air Busan representative stated, "Although total equity has decreased due to net losses caused by worsening external business conditions, we expect to enhance financial stability going forward by eliminating fixed interest expenses through recent conversions of perpetual convertible bonds (CBs) into shares. Amid continued uncertainties in the external business environment such as high oil prices and exchange rates, we will maintain agile cost management and focus all efforts on improving profitability in the second half of the year."
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