Korean Air posts loss despite hedge on fuel

Korean Air Lines reported its first loss in six quarters on Thursday after fuel prices and its tax bill surged. The airline said it had begun hedging fuel costs for the first time.

The price of jet fuel rose 44.7 percent in the first six months of 2005, eroding earnings at Korean Air, Cathay Pacific Airways and other Asian carriers.

“Korean Air can’t afford not to hedge any longer,” said Choi Se Jin, a fund manager at Daehan Investment Trust Management in Seoul. “The added surcharges are helping the airline, but not enough.”

International Herald Tribune