Sales reach 489.6 billion won, up 32% on-year

Swings back to profit after 52.4 billion won loss in Q2

Net profit surges on stronger won, aircraft disposal gains

Jan.-Sept. operating profit of 66.9 billion won marks turnaround

A Jeju Air Boeing 737-8 aircraft [Jeju Air]
A Jeju Air Boeing 737-8 aircraft [Jeju Air]

Jeju Air returned to operating profit in the third quarter, posting 54.9 billion won ($40.9 million) and reversing losses in a single quarter. Sales climbed more than 30 percent from a year earlier, while net profit for the period surpassed 200 billion won, lifted by a stronger won against the dollar and gains from aircraft sales.

The airline disclosed Tuesday that its third-quarter standalone sales reached 489.6 billion won and operating profit came in at 54.9 billion won.

Sales rose 32.2 percent from 370.4 billion won in the same period last year and were up 10.8 percent from 441.7 billion won in the second quarter of this year.

Operating profit swung from a loss of 59.9 billion won in the third quarter of last year to a gain of 54.9 billion won. The airline had also posted an operating loss of 52.4 billion won in the second quarter of this year, making the return to profit a one-quarter turnaround.

The third-quarter operating margin came in at approximately 11.2 percent. The improvement was driven by higher sales volumes during the peak summer travel season.

Net profit for the period was 203.2 billion won — roughly 3.7 times the operating profit figure. That compares with a net loss of 64.8 billion won in the same quarter last year, a swing of 268 billion won. The second quarter of this year had also ended with a net loss of 51.4 billion won.

The wide gap between net profit and operating profit reflected non-operating factors. Jeju Air said foreign-currency-related gains improved as the won strengthened against the dollar, and proceeds from aircraft sales also contributed to the net profit increase.

Cumulative earnings for the year also improved from a year earlier. Sales for the January-to-September period reached 1.43 trillion won, up 36.0 percent from the same period last year.

Cumulative operating profit over the same period was 66.9 billion won, turning around from an operating loss of 140.6 billion won a year earlier. Cumulative net profit also swung from a net loss of 100.8 billion won last year to a gain of 164 billion won this year.

Jeju Air has been expanding its next-generation fleet to ease the cost burden of high fuel prices. On Wednesday, the airline took delivery of its 14th Boeing 737-8, acquired through an outright purchase. Next-generation aircraft now account for 32.6 percent of the carrier's total passenger fleet of 43 planes.

The 737-8 burns less fuel and offers lower maintenance costs than the older 737-800NG. Jeju Air plans to add one more of the type by year-end to further improve operational efficiency.


kwater@heraldcorp.com