Seoul: Korean Air posted a profit in the fourth quarter, rebounding from a loss the year before, on increased cargo revenue spurred by recovery in the global economy, lower fuel costs and a stronger South Korean currency.

South Korea's biggest airline earned 122.29 billion won (Dh389.7 million) in the three months ended December 31, it said in a regulatory filing on Friday. The airline posted a net loss of 644 billion won a year earlier.

The result, Korean Air's third straight quarterly net profit after six consecutive losses, came despite a decline in revenue, which fell 4.9 per cent to 2.58 trillion won from 2.71 trillion won a year earlier.

Korean Air Lines Co, the world's biggest carrier of international commercial cargo among passenger airlines, said in a statement that earnings were boosted by "surging growth" in the cargo business.

Rise of 22%

Cargo sales rose 22 per cent to 942 billion won from the same period the year before, Korean Air said, calling the sector the "major growth driver" for revenue during the quarter amid "a recovery in consumer spending worldwide".

Korean Air also said that international passenger traffic helped boost earnings, rising 11.3 per cent. Jet fuel expenses, meanwhile, declined 22 per cent from the same period the year before to 785.2 billion won, helped by a 15 per cent decline in the average price per gallon of fuel to $2.02.

The South Korean won rose 17 per cent against the dollar on average during the fourth quarter from the same period the year before, according to Bank of Korea data.

International jet fuel is denominated in dollars so a stronger South Korean won can help reduce fuel costs.

The stronger won also helped reduce Korean Air's foreign exchange conversion loss to 19.9 billion won in the fourth quarter from 466.5 billion won the year before.

A stronger won can also ease Korean Air's burden of servicing its foreign-denominated debt. The airline said it had $5.03 billion in dollar-denominated debt at the end of December.

Korean Air's improved fortunes were still not enough to avert a loss for the entire year. The airline said it ended up 61.49 billion won in the red last year, though that was far better than its loss of 1.94 trillion won in 2008.