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KOREAN AIR

3Q17 FINANCIAL RESULTS

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Disclaimer

This presentation is for informational purposes only, contains preliminary financial and other

information about Korean Air Lines Co., Ltd. and is subject to updating, revision, amendment and

completion. This presentation does not and is not intended to constitute or contain any offer of

securities for sale or a solicitation of an offer to purchase any securities of Korean Air Lines Co.,

Ltd. or any other company and neither this presentation nor anything contained herein shall form the

basis of any contract or commitment. Certain statements contained in this presentation may be

statements of future expectations and other forward-looking statements or trend information that are

based on management's current views and assumptions and involve known and unknown risks and

uncertainties that could cause actual results, performance or events to differ materially from those in

the forward-looking statements in this presentation. In addition to statements which are forward-

looking by reason of context, including without limitation, statements referring to risk limitations,

operational profitability, financial strength, performance targets, profitable growth opportunities, and

risk adequate pricing, the words "may, will, should, expects, plans, intends, anticipates, believes,

estimates, predicts, or continue", "potential, future, or further", and similar expressions are intended

to identify forward-looking statements. Korean Air Lines Co., Ltd. assumes no obligation to update

or revise any such statements or any other information contained herein to reflect events or

circumstances that may arise after the date of this presentation.

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2016 Sep 30, 2017 Changes Rate

Current Assets 3,328 4,158 830 24.9%

Cash & Cash equivalent 1,090 1,109 19 1.8%

Non-Current Assets 20,629 21,034 406 2.0%

Aircraft related assets 13,728 14,180 452 3.3%

Investment in associates 24 38 14 57.4%

Total Assets 23,957 25,192 1,236 5.2%

Financial Liabilities 16,305 15,876 -428 -2.6%

Other Liabilities 5,778 6,278 500 8.7%

Total Liabilities 22,082 22,154 72 0.3%

Total Equity 1,874 3,038 1,164 62.1%

Financial Position (Consolidated)

(billion KRW)

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2016

3Q

2017

3QChanges

2016

1~3Q

2017

1~3QChanges

Sales 3,118 3,214 3.1% 8,803 8,985 2.1%

Operating Expense 2,658 2,859 7.5% 7,861 8,265 5.2%

Operating Profit 460 355 -22.7% 942 720 -23.6%

Non Operating Profit 146 -246 -799 -137

Foreign currency

related gain, net638 -97 587 394

Interest Expense, net -93 -103 -273 -303

Income Before Tax 606 109 143 583

Net Income 511 62 85 420

Income Statement (Consolidated)

(billion KRW)

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2016

3Q

2017

3QChanges

2016

1~3Q

2017

1~3QChanges

Sales 3,057 3,126 2.3% 8,635 8,788 1.8%

Operating Expense 2,609 2,747 5.3% 7,731 8,063 4.3%

Operating Profit 448 379 -15.4% 904 725 -19.7%

Non-Operating Profit 72 -260 -775 -142

Foreign currency related

gain/loss, net639 -98 588 405

Interest expense, net -92 -103 -270 -302

Income Before Tax 519 118 129 583

Net Income 428 76 80 429

Income Statement (Non-consolidated)

(billion KRW)

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Balance

(billion)Ratio

Balance

(billion)Ratio

Balance

(billion)Ratio

USD 8.1 62.5% 7.2 57.0% -0.9 -11.1%

KRW 3,830 25.6% 4,180 28.7% 350 9.1%

Others

(EUR/JPY/HK

D in USD)

1.5 11.9% 1.8 14.3% 0.3 20.0%

SUM

(KRW)15,390 100% 14,540 100% -850 -5.5%

End of 2016 Changes(As of) Jun. 30, 2017

Borrowings (Non-consolidated)

(billion)

- FX Rate as of Dec. 31st, 2016 : USD1 / KRW1,208.5- FX Rate as of Sep. 30st, 2017 : USD1 / KRW1,146.7

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3Q2017

(3,126 billion KRW)

Domestic

Passenger

4.4%

International

Passenger

57.1%

Cargo

22.4%

Others

9.4%

Aerospace

6.7%

3Q2016

(3,057 billion KRW)

Domestic

Passenger

4.6%

International

Passenger

60.4%

Cargo

19.1%Others

9.9%

Aerospace

6.0%

Revenue Composition (Non-consolidated)

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3Q16 3Q17 YoY 3Q16 3Q17 YoY

Capacity (Mil ASK) 24,243 24,936 2.9% 997 987 -1.0%

JUL 8,195 8,445 3.0% 320 337 5.2%

AUG 8,303 8,540 2.9% 342 339 -1.0%

SEP 7,745 7,951 2.7% 335 311 -7.0%

Traffic (Mil RPK) 19,604 20,223 3.2% 796 767 -3.6%

JUL 6,767 6,883 1.7% 265 249 -6.0%

AUG 6,858 7,070 3.1% 282 276 -2.2%

SEP 5,978 6,270 4.9% 249 243 -2.4%

L/F(%) 80.9% 81.1% 0.2%p 79.8% 77.7% -2.0%p

Yield (KRW) 94.0 88.2 -6.1% 178.3 177.5 -0.4%

Yield (US Cent) 8.4 7.8 -7.1% 15.9 15.7 -1.4%

구 분International Domestic

Passenger Traffic

Domestic

7%

Japan

10%Chian

12%

SEA

18%

Oceania

3%

Americas

29% Europe

21%

3Q17

0

200

400

600

800

Domestic Japan China SEA Oceania Americas Europe

3Q16 3Q17

-4%

-11%

+9%

+2%

-5%

-24%

+11%

Korea

56%

Japan

7%

China

9%

SEA

7%

Americas

15%

Europe

6%

3Q17

Passenger Revenue by Route Operations

[billion KRW]

[Revenue : Routes] [Revenue : Regional Sales]

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Traffic(RPK) Changes : SEA 14%↑, Europe 9%↑, Oceania 6%↑, Americas 2%↑, Japan 11%↓, China 19%↓

Number of Passengers Carried : 3%↑(Korea Outbound 9%↑, Overseas 2%↓)

Expect strong Korea outbound demand deferred from 3Q to long holidays in October and slow demand recovery from China

Plan to improve profitability with more frequency in SEA and Europe routes

Frequency Expansion : Incheon-Hanoi/Da Nang/Barcelona/Honolulu/Bangkok/Osaka/Fukuoka

Frequency Reduction : Incheon-Vienna/Zurich/Houston

Passenger Business Overview

3Q Business Summary

4Q Business Outlook & Plan

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3Q16 3Q17 YoY

Capacity (Mil AFTK) 2,680 2,794 4.3%

JUL 916 924 0.9%

AUG 890 935 5.1%

SEP 874 934 7.0%

Traffic (Mil FTK) 2,026 2,179 7.5%

JUL 692 727 5.0%

AUG 660 719 8.9%

SEP 675 734 8.7%

L/F (%) 75.6% 78.0% 2.4%p

Yield (KRW) 257.7 292.2 13.4%

Yield (US Cent) 23.0 25.8 12.3%

Cargo (International + Domestic)

Cargo Traffic

Domestic

1%

Japan

5%China

10%SEA

14%Oceania

1%

Americas

43%

Europe

26%

3Q17

0

100

200

300

400

Domestic Japan China SEA Oceania Americas Europe

3Q16 3Q17

+7%+25%

+28%

+18%

+23%

+17%

+19%

Korea

25%

Japan

9%

China

26%

SEA

15%

Americas

13%

Europe

12%

3Q17

Cargo Revenue by Route Operations

[billion KRW]

[Revenue : Routes] [Revenue : Regional Sales]

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Traffic(FTK) Change : Japan 31%↑, Oceania 20%↑, SEA 8%↑, Americas 7%↑, Europe 7%↑, China 6%↑

Total Tonnage Carried : 10%↑ (Korea Outbound 8%↑, Overseas 10%↑)

Expect strong demand to continue during winter peak season

Expect positive cargo demand with the 4th industrial revolution and restored consumer confidence

Plan to provide flexible capacity, expand new air cargo products, and improve cargo network

Cargo Business Overview

3Q Business Summary

4Q Business Outlook & Plan

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Fuel

24%

Labor

17%

Depreciation

15%

Others

19%

Airport

related

11%Maintenance

3%

In-flight

Service

5%

Commission

3%

Rentals

3%

3Q17

( 2,747 billion KRW)

3Q16

(2,609 billion KRW)

Fuel

22%

Labor

17%

Depreciation

17%

Others

19%

Airport

related

12%Maintenance

3%

In-flight

Service

4%

Commission

3%

Rentals

3%

Operating Expense Breakdown (Non-consolidated)

Type No. of Aircrafts Delivery in 4Q17(Month)

A380 10

A330 29

B747-400 4

B747-8I 10

B777 38

B787-9 4 ⑫

B737 36

CS300 0

Passenger Total 131 1

B747F 11

B747-8F 7

B777F 11 ⑩

Cargo Total 29 1

Total 160 2

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Fleet Status

(As of Sep 30th, 2017)

※CS300 delivery schedule is undecided

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Thank you