The Korean flag carrier posted a KRW272 billion (US$247.5 million) net loss for the fourth quarter of 2014 and a KRW458 deficit for the full year, widened from a KRW57 billion loss recorded in the year-ago period.

The net loss for 2014 is reported to be the result of a stronger US dollar which inflated the value of Korean Air’s foreign debts although its operating profit rose, helped by a recovery in the global air cargo industry, falling oil prices and cost-cutting. Korean Air currently has US$8.25 billion in dollar-denominated debt, but operating profit was KRW395 billion won for the year, compared to a loss of KRW19.6 billion in 2013.

Cargo demand was a bright spot for Korean in the fourth quarter, as traffic rose 5.3 per cent on a 3.2 per cent capacity gain. Cargo load factor increased 1.6 points to 80.3 per cent, although yield dropped 3.2 per cent.

Meanwhile, Korean Air has announced a US$1.5 billion deal to buy five Boeing 777 freighters, in addition to one it already has on order.