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‘Exchange Rate, Oil Price Expected to Lower Korean Air’s Competitiveness’
Profitability Issue
‘Exchange Rate, Oil Price Expected to Lower Korean Air’s Competitiveness’
  • By Jung Min-hee
  • January 2, 2017, 02:30
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Korean Air’s profitability is expected to weaken due to rising oil prices and a sharp increase in exchange rates.
Korean Air’s profitability is expected to weaken due to rising oil prices and a sharp increase in exchange rates.

 

An analyst said recently that Korean Air’s profitability is expected to weaken due to rising oil prices and a sharp increase in exchange rates.

"This year, Korean Air’s operating profit rose thanks to a boom in passenger transportation and low oil prices. But its profitability is expected to shrink next year compared to 2016 due to recent exchange rates and oil prices," said Song Jae-hak, a researcher at NH Investment & Securities

"As a result, we reduced Korean Air’s sales to 5.5% and 8.5%, by 1.2% and 2.3% in 2017 and 2018, respectively” Song said. “We lowered our investment opinion to a hold.”