Korean Air2019 Annual Financial Results
1
Disclaimer
This presentation is for informational purposes only, contains preliminary financial and other information about
Korean Air Lines Co., Ltd. and is subject to updating, revision, amendment and completion. This presentation does
not and is not intended to constitute or contain any offer of securities for sale or a solicitation of an offer to purchase
any securities of Korean Air Lines Co., Ltd. or any other company and neither this presentation nor anything
contained herein shall form the basis of any contract or commitment. Certain statements contained in this
presentation may be statements of future expectations and other forward-looking statements or trend information that
are based on management's current views and assumptions and involve known and unknown risks and uncertainties
that could cause actual results, performance or events to differ materially from those in the forward-looking
statements in this presentation. In addition to statements which are forward-looking by reason of context, including
without limitation, statements referring to risk limitations, operational profitability, financial strength, performance
targets, profitable growth opportunities, and risk adequate pricing, the words "may, will, should, expects, plans,
intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions
are intended to identify forward-looking statements. Korean Air Lines Co., Ltd. assumes no obligation to update or
revise any such statements or any other information contained herein to reflect events or circumstances that may
arise after the date of this presentation.
22
Income Statement (Non-consolidated)
2018 2019(E) Changes Remarks
Revenue 126,555 123,000 △3,555 △2.8%
Passenger 77,375 77,675 +300 +0.4% RPK +3.8%, Yield △3.3%
Cargo 30,122 25,574 △4,548 △15.1% RPK △9.8%. Yield △5.9%
Others 19,058 19,751 +693 +3.6% Aerospace +\89.9B, +13.8%
Operating Expense 119,881 120,091 +210 +0.2%
Fuel Expense 32,958 31,832 △1,126 △3.4%Fuel Price △8.3%, Fuel Consumption △0.4%,
Average FX rate (\/$) +6.0%
Other Expense 86,528 88,259 +1,731 +2.0%
Operating Income6,674[5.3%]
2,909[2.4%]
△3,765[△2.9%p]
△56.4%
Non-Operating Income △8,027 △9,752 △1,725
Interest Expense, Net △4,548 △5,059 △511
Foreign CurrencyTranslation Gain/Loss, Net
△3,636 △3,758 △122 Year End Currency: +\39.7/$ (+3.6%)
Derivatives +464 +931 +467
Income before Tax △1,353 △6,843 △5,490
Net Income △1,074 △5,708 △4,634
(Unit: KRW: 00M)
Revenue \12,300B (-\355.5B, -2.8%, yoy)
Foreign Currency Translation Loss (-\375.8B)
• Average F/X Rate : Year 2018 \1,100.4/$ Year 2019 \1,166.1/$ (+\65.7, +6.0%)
33
Dec. 31, 2018 Dec. 31, 2019 Changes Remarks
Current Assets 35,702 32,579 △3,123 △8.7%
Cash Equivalent 12,613 11,458 △1,155 △9.2% Including short term savings
Non-Current Assets 208,031 223,727 +15,696 +7.5%
Aircraft Related Assets 150,276 164,118 +13,842 +9.2% Lease accounting change +\1.13T
Total Assets 243,733 256,306 +12,573 +5.2%
Financial Liabilities 146,732 157,568 +10,836 +7.4%Lease accounting change +\1.475T, currency +\253.2B,Net borrowings △\644.6B
Other Liabilities 66,782 70,574 +3,792 +5.7%
Advance Received 35,384 36,378 +994 +2.8%
Total Liabilities 213,514 228,142 +14,628 +6.9% Liability to Equity Ratio 707% 810% (+103%p)
Total Equity 30,219 28,164 △2,055 △6.8%
Financial Position (Non-consolidated)
(Unit: KRW 00M)
• Year End FX Rate : \1,118.1/$1 (Dec. 31, 2018) \1,157.8/$1 (Dec. 31, 2019) (+\39.7, +3.6%)
\644.6B Decrease in Net Borrowings, excluding Lease Accounting Change & F/X effects
- Lease Accounting Standard Change: +52%p
- Exchange Rate Change: +64%p
☞ Change of Liability to Equity Ratio (+103%p)
4
Passenger Business
5
20172018 2019
YoY YoY
ASK (mil. km) 98,405 99,918 +1.5% 101,108 +1.2%
RPK (mil. km) 77,843 80,191 +3.0% 83,273 +3.8%
L/F 79.1% 80.3% +1.2%p 82.4% +2.1%p
Yield (KRW) 90.5 96.5 +6.6% 93.3 -3.3%
Revenue (KRW 00M) 70,455 77,375 +9.8% 77,675 +0.4%
+8%
+10%+10%
+13%+9%
-7% -2%
+8%
0%
+4%
-1%
-15%+5%
0%
-
5,000
10,000
15,000
20,000
25,000
Americas Europe SEA China Japan Domestic Oceania
2017 2018 2019[Unit: KRW 00M]
Revenue Changes
Passenger Traffic Increase due to Advance Response to Negative Market Conditions
- J/V with Delta Sustaining Trans-Pacific Demand Increase
- Southeast Asia Market Development Complementing Japan / Hong Kong Demand Decrease
5
Passenger Business– Sales by Route/Region
Sales by Route Sales by Region
27% 27% 29%
18% 18%19%
21% 21%21%
12% 13%12%
11% 11% 9%
7% 6% 6%
4% 4% 4%
2017 2018 2019
Oceania
Domestic
Japan
China
SEA
Europe
Americas
64% 63% 61%
13% 13% 16%
6% 6%7%
6% 7%7%
6% 6%5%
5% 5% 4%
2017 2018 2019
Europe
Japan
China
SEA
Americas
Korea
6
Cargo Business
Revenue Changes
7
20172018 2019
YoY YoY
AFTK (mil. ton/km) 10,944 10,837 -1.0% 10,480 -3.3%
FTK (mil. ton/km) 8,593 8,293 -3.5% 7,482 -9.8%
L/F 78.5% 76.5% -2.0%p 71.4% -5.1%p
Yield (KRW) 326.9 363.2 +11.1% 341.8 -5.9%
Revenue (KRW 00M) 28,087 30,122 +7.2% 25,574 -15.1%
+11%
+5%
+2%
+14%+27% -7% +1%
-16%
-20%
-9%+5%
-9%
-14% -14%
-
5,000
10,000
Americas Eurpoe SEA China Japan Domestic Oceania
2017 2018 2019
[Unit: KRW 00M]
Cargo Traffic Decrease due to Prolonged US-China Trade Tension & Global Trade Slowdown
Recovery Plan to Develop Growth Market with Major Global Manufacturers
7
Cargo Business – Sales by Route/Region
Sales by Route
42% 43% 42%
26% 25%23%
15% 14%15%
10% 10% 12%
5% 6% 6%1% 1% 1%
1% 1% 1%
2017 2018 2019
Oceania
Domestic
Japan
China
SEA
Europe
Americas
25% 24% 24%
15% 14% 16%
26%25%
25%
13%13%
14%
12%11%
11%
9%13% 10%
2017 2018 2019
Japan
Europe
Americas
Korea
SEA
China
Sales by Region
8
Operating Expense
Fuel
26%
Labor
21%
Airport /
PAX&CGO
Handling
18%
Depreciation,
Rentals
17%
Manufacturing
5%
Maintenance
2% Others
11%
+26%
+8%
+7% 0%
+6% -11%
+15%
-3%
+4%
+6%0%
+42%
-49%
-4%
-
10,000
20,000
30,000
40,000
Fuel Labor Airport /
PAX&CGO
Handling
Depreciation,
Rentals
Manufacturing Maintenance Others
2017년 2018년 2019년
[Unit : KRW 00M]
Operating Expense \12,009B (+\60.5B, +0.5%, yoy)
- Fuel \3.200B (-\113B, -3.4%) : Fuel price decrease, Currency increase
- Labor \2.500B (+\101B, +4.3%) : New hire & Welfare increase
- Airport/Handling \2.200B (+\125B, +6.1%) : Airport fees increase
9
Passenger Business Outlook & Plan
Increase Long/Medium-Haul Routes
Increase Frequency in America/Southeast Asia Routes (L.A, Boston, Singapore, Deli)
Diversify Eastern Europe Destinations (New Route: Budapest, May 2020)
Improve Aircraft Utilization
Optimize Flight Patterns per Aircraft Type
Utilize Charters to Capture New Demand
Improve Delta J/V Profitability
Increase Transit Demand & US Domestic Connection Sales
Expand US Mainstream Corporate Sales
10
Cargo Business Outlook & Plan
Improve Sales by Developing Growth Market
Increase Alternative Market Supply (Eastern Europe, China, South America)
Continue Supply Increase in Growing Market (following manufacturing facilities relocation)
Improve Profit by Supply Control
Optimize Supply to Demand Growing Markets (Charters)
Securing Contract / Project Shipment
Attract Demand from Global Manufacturer and Major Forwarder
Enhance Marketing for Major Clients (Semi-Conductor Equipment, Fashion Items)
Expand High-Margin Sales (Medical Products, E-commerce, Fresh Food, IT Equipment)
11
Fleet Status
Type As of Dec. 31, 2018 As of Dec. 31, 2019
Wide Body
A380 10 10
A330 29 29
B747-400 2 2
B747-8I 10 10
B777 42 44
B787-9 9 10
Narrow BodyB737-800/900 32 31
A220 (CS300) 9 10
Passenger Total 143 146
Freighter
B747F 4 4
B747-8F 7 7
B777F 12 12
Cargo Total 23 23
Total 166 169
• B737-MAX8: Introduction delayed until safety is confirmed
12
Thank you