Korean Air Estimates Hanjin-Related Losses at Up to $344 MillionBy
Carrier owns 33% of container line that filed for receivership
Airline also made loans to Hanjin as part of logistics group
Losses on loans and an equity stake in the container shipping line will be as much as 383.3 billion won ($344 million), Korean Air Lines said in a regulatory filing Wednesday. Operating profit for the airline will probably be 1 trillion won this year, according to the average of analyst estimates.
Hanjin Shipping is part of Hanjin Group, which also owns Korean Air Lines, the world’s third-largest cargo airline. Korean Air loaned funds to Hanjin Shipping and bought shares in the container line in 2014 to become the biggest shareholder with 33 percent. The group, which also counts airport services, logistics and mineral water among its businesses, is headed by Chairman Cho Yang Ho.
Korean freight charges surged about 50 percent after the container line filed for court receivership, Korea Economic Daily reported Thursday, citing unidentified shipping industry officials. Freight charges on Hanjin’s main route between Busan and Los Angeles have jumped to about $1,700 per forty-foot equivalent unit from $1,100.
Hanjin is among shipping lines grappling with a slump in global trade since the 2008 financial crisis and the slowest pace of economic growth in China in a quarter century.
The container line had debt of 6.1 trillion won at the end of June, according to its first-half earnings report.