[EQUITIES] Asiana Airlines' Q3 operating profit to rise 60%: analyst

[THE INVESTOR] Earnings of Asiana Airlines, the nation’s second-largest air carrier, will gradually improve through the rest of the year, a local securities firm said on Aug. 3.

“The company’s operating profit is expected to turn to black at 18.4 billion won (US$16.50 million) due to its fuel cost reduction efforts and improved profitability of medium and long-haul routes,” said Shin Min-seok, an analyst at Hana Financial Investment.

Shin forecast that Asiana will see its operating profit rise 60.4 percent in the third quarter from a year ago to 111.2 billion won.

“We expect Asiana to log better earnings as the carrier has revamped its unprofitable air routes since Air Seoul was launched,” he said.

Launched in July this year, Air Seoul is a new low-cost carrier of Asiana Airlines. The full service carrier said it hopes to accelerate its growth and focus on more profitable long-haul services by transferring some short-distance services to the budget airline.

Hana Financial Investment raised Asiana from “neutral” to “buy” rating while increasing the price target from 6,000 won to 7,000 won.

Asiana Airlines’ stock lost 0.39 percent to 5,130 won as of 10:50 a.m.

By Park Han-na (hnpark@heraldcorp.com)