Korean Air forecasts over W840b in profits

Korea’s largest air carrier forecast over 840 billion won ($747.7 million) in operational profits this year at a shareholder meeting Friday morning, the first session to be led by new President Cho Won-tae.

“This year, we have decided that our management policy will be to create a sustainable business that can produce profits even in times of rapid environmental change,” Cho said at the meeting.

It was the first time that Cho Won-tae led a shareholder meeting instead of his father, Korean Air CEO and Hanjin Group Chairman Cho Yang-ho.
Cho said that the company expected to reach 12.2 trillion won in revenue and 840 billion won in operational profit this year.

This represents a slowdown from last year, when the air carrier saw 1.1 trillion won in operational profit.

At the event, shareholders passed all of the items on the agenda including naming new members of the board. 

The meeting, held at Korean Air’s headquarters in Gangseo-gu, Seoul, came at a difficult time as the company is still struggling to resolve a dispute with its pilots’ union and handle an uncertain international economic climate.

Korean Air has failed to pay out dividends since 2011 and industry watchers expected shareholders to express their frustration at the meeting. However, the meeting went smoothly, finishing in just half an hour.

The pilots’ union also decided Thursday to take back their threat of another strike starting Friday. Late Thursday night, Korean Air released a statement saying that it “respected the union’s decision” and that it would do its best for an “amicable agreement between the company and the union.”

By Won Ho-jung (hjwon@heraldcorp.com)