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KOREAN AIR

4Q17 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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End of 2016 End of 2017 Changes Rate

Current Assets 2,876 3,281 406 14.1%

Cash & Cash equivalent 746 576 -170 -22.8%

Non-Current Assets 19,830 20,282 451 2.3%

Aircraft related assets 13,728 14,308 580 4.2%

Total Assets 22,706 23,563 857 3.8%

Financial Liabilities 15,391 13,829 -1,563 -10.2%

Other Liabilities 5,662 6,062 401 7.1%

Total Liabilities 21,053 19,891 -1,162 -5.5%

Total Equity 1,653 3,672 2,019 122.1%

Debt Ratio 1,274% 542% -732%p

Financial Position (Non-consolidated)

(billion KRW)

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2016

4Q

2017

4QChanges 2016 2017 Changes

Sales 2,868 3,015 5.1% 11,503 11,803 2.6%

Operating Expense 2,693 2,784 3.4% 10,424 10,847 4.1%

Fuel Expense 593 708 19.4% 2,190 2,616 19.5%

Operating Profit 175 231 31.7% 1,079 956 -11.4%

Operating Profit Rate 6.1% 7.7% 1.6%p 9.4% 8.1% -1.3%p

Non-Operating Profit -1,046 404 -1,821 262

Foreign currency related

gain/loss, net-884 608 -296 1,013

Interest expense, net -103 -97 -373 -399

Income Before Tax -871 635Turn to

profit-742 1,218

Turn to

profit

Net Income -672 479Turn to

profit-591 908

Turn to

profit

Income Statement (Non-consolidated)

(billion KRW)

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4Q2017

(3,015 billion KRW)

Domestic

Passenger

4.0%

International

Passenger

53.9%

Cargo

26.4%

Others

10.3%

Aerospace

5.4%

4Q2016

(2,868 billion KRW)

Domestic

Passenger

4.1%

International

Passenger

51.6%

Cargo

24.7% Others

11.1%

Aerospace

8.5%

Revenue Composition (Non-consolidated)

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Annual Revenue Change (Non-consolidated)

Domestic

Passenger

4.3%

International

passenger

55.4%

Cargo

23.8%Others

10.3%

Aerospace

6.2%

0 1 2 3 4 5 6 7

Domestic

Passenger

International

Passenger

Cargo

Aerospace

Others

2017 2016

+365.0

-170.8

+25.9

2017 Total Revenue : 11.8 trillion KRWincreased +2.6% yoy (+299.9 billion KRW)

+13.3 (billion KRW)

+66.5

trillion KRW

Domestic

7%

Japan

11%China

12%

SEA

22%

Oceania

5%

Americas

26%

Europe

17%

4Q17

0

200

400

600

800

Domestic Japan China SEA Oceania Americas Europe

4Q16 4Q17

+3%

+3%

+20%

+8%

+6%

+0%+18%

Korea

57%

Japan

6%

China

7%

SEA

8%

Americas

16%

Europe

6%

4Q17

Passenger Revenue by Route Operations

[billion KRW]

[Revenue : Routes] [Revenue : Regional Sales]

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Passenger Traffic Growth Trend

2017 Passenger Traffic Growth (RPK) increased +2.6% yoy

69.8%

76.1%

77.0%

77.9%

76.7%

74.7%

76.9%

78.5%79.3%

66.0%

68.0%

70.0%

72.0%

74.0%

76.0%

78.0%

80.0%

50,000

55,000

60,000

65,000

70,000

75,000

80,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

RPK(좌) 여객 L/F(우)million RPK

RPK(L) L/F(R)

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Traffic(RPK) Changes : SEA 10%↑, Europe 8%↑, Oceania 4%↑, Americas 4%↑, Japan 2%↓, China 4%↓

Number of Passengers Carried : 5%↑

(Korea Outbound 17%↑, Overseas 8%↓)

Worldwide air passenger traffic to increase +6.0% YoY - IATA

Opening of ICN Airport Terminal 2, PyeongChang Olympics, and JV partnership with Delta Airlines to increase overall demand in the passenger sector.

To constantly monitor China & Japan demand for capacity restoration as the sales recover from THAAD installation & North Korea related issues

Frequency Expansion : Incheon - Madrid / Istanbul / Aomori / Sapporo

Passenger Business Overview

4Q17 Business Summary

2018 Business Outlook & Plan

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4Q16 4Q17 YoY 4Q16 4Q17 YoY

Capacity (Mil ASK) 22,414 23,991 7.0% 908 875 -3.7%

Oct 7,673 8,118 5.8% 340 325 -4.6%

Nov 7,154 7,678 7.3% 286 275 -4.1%

Dec 7,587 8,196 8.0% 281 276 -2.1%

Traffic (Mil RPK) 17,525 18,418 5.1% 699 675 -3.3%

Oct 6,068 6,218 2.5% 272 254 -6.5%

Nov 5,457 5,897 8.1% 223 219 -1.7%

Dec 6,000 6,302 5.0% 203 202 -0.7%

L/F(%) 78.2% 76.8% -1.4%p 77.0% 77.2% 0.3%p

International Domestic

Passenger Traffic

Domestic

1%

Japan

5%China

10%SEA

14%Oceania

1%

Americas

42%

Europe

27%

4Q17

0

100

200

300

400

Domestic Japan China SEA Oceania Americas Europe

4Q16 4Q17

-9%+24%

+20%

+28%

+12%

+8%

+15%

Korea

25%

Japan

11%

China

26%

SEA

14%

Americas

12%

Europe

12%

4Q17

Cargo Revenue by Route Operations

[billion KRW]

[Revenue : Routes] [Revenue : Regional Sales]

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Cargo Traffic Growth Trend

2017 Cargo Traffic Growth (FTK) increased +5.3% yoy

74.7%

76.3%

75.4%

76.3%

77.0%

79.5%

77.9%

76.9%

78.5%

72.0%

73.0%

74.0%

75.0%

76.0%

77.0%

78.0%

79.0%

80.0%

7,000

7,500

8,000

8,500

9,000

9,500

10,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

FTK(좌) 화물 L/F(우)million FTK

FPK(L) L/F(R)

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Traffic(FTK) Change : Oceania 32%↑, Japan 17%↑, Americas 3%↑,Europe 3%↑, SEA 2%↑, China 0%↑

Total Tonnage Carried : 5%↑ (Korea Outbound 2%↓, Overseas 7%↑)

The demand for air cargo in 2018 to increase +4.5% yoy (IATA)

Global economy to grow +3.9% (IMF) Positive indicator for air cargo - Reduction of U.S. corporate tax rate - Steady demand for IT devices delivered from the Asia-Pacific region

To secure profitability of cargo business by expanding air cargo transport product and flexible capacity management

Cargo Business Overview

4Q17 Business Summary

2018 Business Outlook & Plan

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4Q16 4Q17 YoY

Capacity (Mil AFTK) 2,750 2,854 3.8%

Oct 921 913 -0.8%

Nov 946 983 3.8%

Dec 883 958 8.5%

Traffic (Mil FTK) 2,205 2,280 3.4%

Oct 736 724 -1.6%

Nov 752 786 4.5%

Dec 718 771 7.4%

L/F (%) 80.2% 79.9% -0.3%p

Cargo (International + Domestic)

Cargo Traffic

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Fuel

25%

Labor

17%

Depreciation

15%

Others

18%

Airport

related

11%

Maintenance

4%

In-flight

Service

4%

Commission

3%

Rentals

3%

4Q17

( 2,784 billion KRW)

4Q16

(2,693 billion KRW)

Fuel

22%

Labor

17%

Depreciation

16%

Others

19%

Airport

related

11%Maintenance

5%

In-flight

Service

4%

Commission

3%

Rentals

3%

Operating Expense Breakdown (Non-consolidated)

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Annual Operating Expense Change (Non-consolidated)

Fuel

24%

Labor

18%

Depreciation

15%

Otehrs

18%

Airport

related

11%Maintenance

4%

In-flight

Service

4%

Commission

3%

Rentals

3%

2017 Total Operating Expense : 10.8 trillion KRW, increased +4.1% yoy (+422.7 billion KRW)

0 1 2 3 4 5

Fuel

Labor

Depreciati

on

Rentals

Others

2017 2016

+426.1 (billion KRW)

+63.6

-64.6

+85.6

-88.0

trillionKRW

Type No. of Aircrafts Delivery in 2018(month)

A380 10

A330 29

B747-400 4

B747-8I 10

B777 38 ②③④⑤

B787-9 5 ⑥⑦⑨⑫

B737 35

CS300 2 ②③④⑤⑥⑦⑧⑩

Passenger Total 133 16

B747F 9

B747-8F 7

B777F 12

Cargo Total 28 0

Total 161 16

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Fleet Status

(As of Dec 31st, 2017)

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Balance

(billion)Ratio

Balance

(billion)Ratio

Balance

(billion)Ratio

USD 8.1 62.5% 7.2 55.6% -0.9 -11.1%

KRW 3,830 25.6% 4,150 30.0% 320 8.4%

Others

(EUR/JPY/HK

D in USD)

1.5 11.9% 1.9 14.4% 0.4 26.7%

SUM

(KRW)15,390 100% 13,830 100% -1,560 -10.1%

End of 2016 ChangesEnd of 2017

Borrowings (Non-consolidated)

(billion)

- FX Rate as of Dec. 31st, 2016 : USD1 / KRW1,208.5- FX Rate as of Dec. 31st, 2017 : USD1 / KRW1,071.4

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