Asiana posts 1st profit in 3 quarters as travel peaks during holidays

SEOUL, South Korea – Asiana Airlines Inc. reported its first profitable quarter this year as travel peaked during the fall holidays.

South Korea's second-largest air carrier said Friday that its July-September quarter earnings amounted to 82.8 billion won ($77.8 million), up 3.3 percent over a year earlier.

But third-quarter operating income plunged 42 percent to 63.4 billion won while sales dropped 3 percent to 1.52 trillion won.

Asiana said the weak yen continued to dampen travel demand from Japan, while overseas trips by other passengers increased as demand typically rises during the third quarter.

Analysts said despite an overall increase in passengers during the fall peak season and long holidays in South Korea, Asiana likely saw a drop in air fares and freight charges due to heightened competition from budget airlines.

Asiana Airlines makes more than half of its revenues from overseas passenger flights. This year, the company's passenger business was hit by lower demand for flights from Japan to South Korea, a result of the weakened value of the Japanese yen and belligerent rhetoric from North Korea that threatened a nuclear war earlier this year.

Despite the third-quarter profit, the company remained in red for the first nine months of this year, with a net loss totaling 45.6 billion won.

The carrier is the operator of the Boeing 777 that crash landed in San Francisco in July 6, killing three and injuring dozens.

Despite the deadly accident, Asiana likely maintained the third-quarter boarding rate about the same level as one year earlier, said Yoon Hee-do, an analyst at Korea Investment & Securities. But fares dropped sharply, he said.