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Jin Air shifts to net loss in 2019 on lower demand on Japan, Hong Kong routes

All News 18:56 February 03, 2020

SEOUL, Feb. 3 (Yonhap) -- Jin Air Co., the low-cost unit of Korean Air Lines Co., said on Monday that it shifted to a net loss in 2019 due to lower demand on Japanese and Hong Kong routes.

Jin Air swung to a net loss of 54.2 billion won last year from a net profit of 44.5 billion won a year earlier, the company said in a statement.

"Increased flights by low-cost carriers and worsening business environments involving Japan's export curbs and protests in Hong Kong against China (over a controversial extradition bill) resulted in the net result," the statement said.

Jin Air shifts to net loss in 2019 on lower demand on Japan, Hong Kong routes - 1

In July last year, Japan tightened regulations on exports to South Korea of three high-tech materials crucial for the production of semiconductors and displays. In August, Japan officially removed South Korea from its list of countries given preferential treatment in trade procedures.

Japan took the moves in apparent retaliation against a Seoul court ruling that ordered Japanese companies to compensate South Korean workers forced into labor during World War II.

This year, Jin Air expects growing uncertainties surrounding the rapidly spreading coronavirus that first emerged in China late last year to further weigh on its bottom line.

The budget carrier also shifted to an operating loss of 49.1 billion won in 2019 from an operating profit of 63 billion won a year ago. Sales fell 9.9 percent to 910.2 billion won from 1.01 trillion won during the same period.

South Korea has two full-service carriers -- Korean Air and Asiana Airlines Inc. -- and seven low-cost carriers (LCCs) -- Jeju Air, Jin Air, Air Busan Co., Air Seoul Inc., Eastar Jet, T'way and Fly Gangwon.

Two more LCCs -- Air Premia Co. and Aero K Airlines Co. -- are expected to join the market this year, bringing the country's total number of LCCs to nine.

kyongae.choi@yna.co.kr
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