Mainland boost for Korean Air

PUBLISHED : Wednesday, 15 April, 1998, 12:00am
UPDATED : Wednesday, 15 April, 1998, 12:00am

Korean Air (KAL) is planning to launch freighter services between Seoul and Shanghai and Seoul and Tianjin.

The Korean Government granted the carrier permission to fly to the two destinations after Beijing and Seoul signed an air services agreement last year.

'It is anticipated that the routes in the China market will be very positive and of great sales potential for Korean Air,' a Korean Air official said.

Flight frequencies and definitive dates for inauguration of the routes had not yet been determined, she said.

Last year, Korean Air reported a 6.7 per cent increase in available tonne-kilometre to 7,153 tonnes, and a 14.6 per cent increase in freight tonne-kilometre to 5,718.

The carrier carried 1.09 million tonnes of freight for the whole year, representing a 14.8 per cent increase on the year.

The official said Korean Air Cargo would acquire two new aircraft - a B747-400 freighter and an MD11 freighter this year - but declined to give specific dates.

Korean Air is facing lean times as its parent, South Korea's eighth-largest conglomerate Hanjin Group, has encountered cash-flow problems in recent months.

Hanjin's problems stem from short-term loans and financing arrangements involving the purchase of vessels and equipment and the acquisition of a 75 per cent stake in Bremen-based DSR-Senator.

Korean Air Cargo operates 17 freighters, including two B747-400Fs, 10 B747-200Fs, three MD11Fs and two A300Fs, and also plans to add B747-400Fs and MD11Fs next year.

The carrier also plans to phase out its older aircraft to decrease the average age of its fleet.

Since last year's International Monetary Fund bailout programme was agreed, Korean Air has been implementing extensive restructuring measures in an effort to overcome the troubling financial and foreign exchange climate.

Officials said the airline was confident it could maintain its competitive edge through continued streamlining of its management.

Despite the economic difficulties, the devaluation of the won had boosted the country's outbound and transit cargo volumes from Southeast Asia to the United States and Europe, the official said.

This made Korean Air a strong competitor in Southeast Asia and the trans-Pacific market.

Korean Air expects an increase in domestic cargo volume.

The spokesman said the carrier would concentrate on increasing cargo sales in markets such as Southeast Asia, Oceania and China.

In January, Korean Air added Ho Chi Minh City to its cargo route.

To address the imbalance of flying fully loaded freighters to the US from Seoul and coming back almost empty, Korean Air is reportedly holding talks with Air China or China Eastern Airlines to share capacity and reduce the cost of these flights.

Kimpo international airport handled 102,060 tonnes of cargo in February, compared with 111,113 tonnes in the same month in 1997. Volumes decreased 3 per cent in February, compared with January, when 104,790 tonnes of air freight were handled, said the Korea Airport Authority.

Exports remained fairly constant at 52,942 tonnes in February against 51,105 tonnes in the same month of 1997 and 53,201 tonnes in January this year. Imports fell to 49,118 tonnes in February, compared with 60,008 tonnes in February last year and 51,588 tonnes in January.