KOREAN AIR

1Q18 Financial Results

2

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.

3

Dec. 31, 2017 Mar. 31, 2018 ChangeRate of

Change

Current Assets 3,220 3,726 506 15.7%

Cash & Cash Equivalent 576 942 366 63.6%

Non-Current Assets 20,203 20,362 159 0.8%

Aircraft Related Assets 14,308 14,559 251 1.8%

Total Assets 23,423 24,088 665 2.8%

Financial Liabilities 13,829 14,260 431 3.1%

Other Liabilities 5,922 6,232 310 5.2%

Total Liabilities 19,751 20,492 741 3.8%

Total Equity 3,672 3,596 -76 -2.1%

Debt Ratio 538% 570% +32%p

Financial Position (Non-consolidated)

* Dividends of KRW 24 billion and the effect of IFRS 15 reflected

(Unit: KRW billion)

4

1Q17 1Q18 ChangeRate of

Change

Sales 2,811 3,017 207 7.4%

Operating Expense 2,626 2,840 215 8.2%

Fuel Expense 634 729 95 15.0%

Labor Expense * 440 519 79 17.9%

Operating Profit 185 177 -8 -4.3%

Non-Operating Profit 538 -144 -682

Foreign Currency Related

Gain/Loss, Net765 -15 -780

Interest Expense, Net -97 -101 -4

Income Before Tax 723 33 -690

Net Income 563 23 -540

(Unit: KRW billion)

Income Statement (Non-consolidated)

Maintained strong sales growth despite a rise in fuel price and the one-time labor expense

* Safety Performance Incentive of KRW 53 billion reflected

5

Revenue Changes (Non-consolidated)

0 500 1,000 1,500 2,000

Domestic

Passenger

International

Passenger

Cargo

Aerospace

Others

1Q18 1Q17

+58

-10

-14

1Q18 Revenue: KRW 3,017 bil., +7% YoY increase (KRW 207 bil.)

-7

+180

(Unit: KRW billion)

Domestic

Passenger

3.3%

International

Passenger

58.1%

Cargo

23.1%Others

10.2%

Aerospace

5.3%

Domestic

5%

Japan

13%China

12%

SEA

25%

Oceania

5%

Americas

25%

Europe

15%

1Q18

Passenger Revenue by Route Operations

0

200

400

600

800

Domestic Japan China SEA Oceania Americas Europe

1Q17 1Q18

-8%

+6%

+12%

+5%

+7%

+0%

(Unit: KRW billion)

+13%

[Revenue by Routes]

Korea

55%

Japan

7%

China

8%

SEA

7%

Americas

17%

Europe

6%

1Q18

[Revenue by Region]

7

Passenger Business Overview

1Q18 Business Summary

Traffic (RPK) Changes : SEA 7%↑, Europe 7%↑, Americas 5%↑,Japan 1%↑, Oceania 0%↑, China 2%↓

No. of Passengers Carried : 5%↑ (Korea Outbound 5%↑, Overseas 4%↑)

2Q18 Business Outlook & Plan

Demand recovery due to improved relationship between South Korea and China and the ease of tension over North Korea’s nuclear threats

Improved flight schedules and transit convenience through JV with Delta (KAL-Delta launched JV on May 1, 2018)

Frequency Expansion: Incheon - Madrid, Istanbul, Sapporo, Hanoi, Da Nang, Barcelona

Frequency Reduction: Incheon - Los Angeles, Houston

8

Passenger Traffic

1Q17 1Q18 YoY 1Q17 1Q18 YoY

Capacity (Mil ASK) 22,335 23,662 5.9% 850 779 -8.3%

Jan. 7,875 8,200 4.1% 289 262 -9.4%

Feb. 7,023 7,501 6.8% 261 243 -6.9%

Mar. 7,437 7,961 7.0% 300 274 -8.5%

Traffic (Mil RPK) 17,925 18,785 4.8% 640 563 -12.1%

Jan. 6,538 6,615 1.2% 223 200 -10.3%

Feb. 5,733 5,910 3.1% 204 173 -14.8%

Mar. 5,654 6,260 10.7% 214 189 -11.3%

L/F(%) 80.3% 79.4% -0.9%p 75.4% 72.3% -3.1%p

Yield (KRW) 87.9 90.5 3.0% 164.9 173.3 5.0%

Yield (US Cent) 7.6 8.4 11.0% 14.3 16.1 13.0%

International Domestic

Domestic

1%Japan

6%

China

10%SEA

15%Oceania

1%

Americas

40%

Europe

27%

1Q18

0

100

200

300

400

Domestic Japan China SEA Oceania Americas Europe

1Q17 1Q18

-14%+27%

+1%

+5%

+11%

+9%

+12%

[Revenue by Routes] [Revenue by Region]

Korea

26%

Japan

13%

China

21%

SEA

14%

Americas

14%

Europe

12%

1Q18

Cargo Revenue by Route Operations

(Unit: KRW billion)

10

Cargo Business Overview

1Q18 Business Summary

Traffic (FTK) Changes : Japan 14%↑, Americas 3%↑, Europe 2%↓,China 2%↓, Oceania 7%↓, SEA 10%↓

Total Tonnage Carried : 1%↓ (Korea Outbound 11%↓, Overseas 1.9%↑)

2Q18 Business Outlook & Plan

Continuous growth in air cargo demand (global economic growth forecast)

Delivery of high-demand IT/semiconductor products, fresh products, and e-commerce items

Cooperation with global forwarders/suppliers

Utilization of passenger aircraft cargo space for efficient supply management

11

Cargo Traffic

1Q17 1Q18 YoY

Capacity (Mil AFTK) 2,584 2,622 1.5%

Jan. 853 884 3.7%

Feb. 782 796 1.8%

Mar. 949 942 -0.8%

Traffic (Mil FTK) 2,020 2,009 -0.6%

Jan. 641 664 3.5%

Feb. 615 597 -2.9%

Mar. 764 748 -2.1%

L/F (%) 78.2% 76.6% -1.6%p

Yield (KRW) 285.8 315.9 10.5%

Yield (US Cent) 24.8 29.4 18.8%

Cargo (international + Domestic)

12

Operating Expense Changes (Non-consolidated)

Fuel

26%

Labor

18%

Depreciation

14%

Others

17%

Airport

Related

10%Maintenance

4%

In-flight

Service

4%

Commission

4%

Rentals

3%

1Q18 Operating Expense: KRW 2,841 bil., +8% YoY increase (KRW 215 bil.)

0 500 1,000 1,500

Fuel

Labor

Depreciati

on

Rentals

Others

1Q18 1Q17

+95

-6

+48

+79 (including the Safety Perfor-mance Incentive (+53))

-1

(KRW billion)

Type of Fleet No. of Aircrafts Delivery in 2018 (Month)

A380 10

A330 29

B747-400 4

B747-8I 10

B777 41 ⑤

B787-9 5 ⑥⑦⑨⑫

B737 35

CS300 4 ⑤⑥⑦⑩⑪⑫

Passenger Total 138 11

B747F 7

B747-8F 7

B777F 12

Cargo Total 26 0

Total 164 11

13

Fleet Status

(As of Mar. 31, 2018)

14

Borrowings (Non-consolidated)

- FX Rate as of Dec. 31, 2017 : KRW1,071.4 / USD1- FX Rate as of Mar. 31, 2018 : KRW1,066.5 / USD1

Balance

(billion)Ratio

Balance

(billion)Ratio

Balance

(billion)Ratio

USD 7.2 55.6% 7.3 54.8% 0.1 1.4%

KRW 4,150 30.0% 4,420 31.0% 270 6.5%

Others(EUR, JPY,

HKD in USD)

1.9 14.4% 1.9 14.2% 0 0.0%

SUM

(KRW)13,830 100% 14,260 100% 430 3.1%

Currency

Dec. 31, 2017 ChangeMar. 31, 2018

15

Dec. 31, 2017 Mar. 31, 2018 ChangeRate of

Change

Current Assets 3,582 4,061 479 13.4%

Cash & Cash Equivalent 761 1,386 624 82.0%

Non-Current Assets 21,066 21,206 139 0.7%

Aircraft Related Assets 14,308 14,559 251 1.8%

Total Assets 24,649 25,267 618 2.5%

Financial Liabilities 14,853 15,279 426 2.9%

Other Liabilities 6,045 6,353 308 5.1%

Total Liabilities 20,898 21,631 734 3.5%

Total Equity 3,751 3,636 -116 -3.1%

Debt Ratio 557% 595% +38%p

Financial Position (Consolidated)

(Unit: KRW billion)

16

1Q17 1Q18 ChangeRate of

Change

Sales 2,866 3,102 236 8.2%

Operating Expense 2,675 2,936 261 9.8%

Operating Profit 192 166 -25 -13.2%

Non-Operating Profit 528 -167 -695

Foreign Currency Related

Gain/Loss, Net747 -15 -762

Interest Expense, Net -98 -112 -14

Income Before Tax 719 -1 -720

Net Income 559 -10 -569

Financial Position (Consolidated)

(Unit: KRW billion)

17

Thank you