Korean Air credited rising passenger and cargo demand and a strong won for an impressive first quarter during which it more than doubled its net profit to KRW127 billion ($134 million) from the KRW59 billion earned in the quarter ended March 31, 2005.

"The operating environment in the first quarter of 2006 was not without challenges," President Jong-Hee Lee said. "Fuel costs remained at a high level, yet we were able to offset these and keep the increase in operating expenses at a reasonable level by lowering maintenance and rental expenses."

Operating revenue climbed 7.8% to KRW1.84 trillion as traffic and yields grew across all segments. Expenses increased 6.2% to KRW1.74 trillion and operating income rose 49.3% to KRW91 billion.

Domestic traffic was up 6.6% to 864 million RPKs against a 1.6% drop in capacity to 1.4 billion ASKs, raising load factor 4.7 points to 61.8%. Domestic yields increased 2.8% to 16.2 cents. International traffic climbed 7.3% to 11.08 billion RPKs as capacity grew 7.6% to 16.01 billion ASKs and load factor dipped 0.1 point to 69.2%. Yields rose 7.8% to 7.6 cents, helping boost international passenger revenue 9.8% to KRW914 billion. The freight segment continued to perform well as load factor improved 5.2 points to 79.2% and yield increased 6.8% to 26.4 cents.

Korean added a 747-400 and a dash 400F to its fleet last quarter and sold a 747-300F. Yesterday it announced it exercised options for two 747-400BCF kits, the first of which already is being installed by Boeing at Taikoo Aircraft Engineering in Xiamen. Touch labor and redelivery will occur at Korean's facility in Gimhae. The airline intends to use up to 20 kits to convert its own and third-party aircraft.