Financial Position (Consolidated)

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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 forwardlooking 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. 2

3 Financial Position (Consolidated) (billion KRW) 2,015 End of Sep Changes Rate Current Assets 3,289 3, % Cash & Cash equivalent % Non-current Assets 20,891 20, % Aircraft related assets 14,106 14, % Investment in associates 1) % Total Assets 24,180 23, % Financial Liabilities 16,198 15, % Current 6,041 5, % Non-current 10,157 10, % Other Liabilities 5,484 5, % Total Liabilities 21,681 21, % Total Equity 2,499 2, % 1) Book value of Hanjin Shipping shares 3

4 Income Statement (Consolidated) (billion KRW) 3Q15 Changes Rate Sales 2,973 3, % Operating Expense 2,631 2, % Operating Profit % Non-operating Profit ,105 Foreign currency related loss, net ,310 Interest expense, net Impairment loss 1) Income Before Tax ,223 Turn to profit Net Income ,018 Turn to profit 1) Hanjin Shipping related losses 4

5 Income Statement (Non-consolidated) (billion KRW) 3Q15 Changes Rate Sales 2,919 3, % Operating Expense 2,587 2, % Operating Profit % Non-Operating Profit ,042 Foreign currency related loss, net ,311 Interest expense, net Impairment loss 1) Income Before Tax ,157 Turn to profit Net Income Turn to profit 1) Hanjin Shipping related losses 5

6 Borrowings (Non-consolidated) End of 2015 (As of) Sep. 30 th, 2016 Changes Balance (billion) Ratio Balance (billion) Ratio Balance (billion) Rate USD % % KRW % % % Others (EUR/JPY/HKD in USD) Total (KRW) % % % % % % - FX Rate as of Dec. 31 st, 2015 : USD1 / KRW1, FX Rate as of Sep. 30 th, 2016 : USD1 / KRW1,

7 Revenue Composition (Non-consolidated) 3Q15 (2,919 billion KRW) ( 3,057 billion KRW) Cargo 21.2% Others 9.1% Cargo 19.0% Others Aerospace 7.9% 9.9% Aerospace 6.0% Int'l PAX 57.2% Int'l PAX 60.4% Domestic PAX 4.6% Domestic PAX 4.6% 7

8 Passenger Traffic International Domestic 3Q15 YoY 3Q15 YoY Capacity (Mil ASK) 22,827 24, % % JUL 7,399 8, % % AUG 7,987 8, % % SEP 7,441 7, % % Traffic (Mil RPK) 18,083 19, % % JUL 5,921 6, % % AUG 6,615 6, % % SEP 5,547 5, % % L/F (%) 79.2% 80.9% 1.6%p 75.2% 79.8% 4.6%p Yield (KRW) % % Yield (US Cent) % % 8

9 Passenger Revenue by Route Operations [billion KRW] Q15 +4% % +19% +29% +13% +3% +3% 0 Domestic Japan China SEA Oceania America Europe [Revenue : Routes] [Revenue : Regional Sales] America 30% Europe 18% America 15% Europe 5% Oceania 3% SEA 16% China 15% Domestic 7% Japan 11% SEA 7% China 12% Japan 8% Korea 53% 9

10 Passenger Business Overview 3Q Business Summary Traffic(RPK) Changes : China 30%, Japan 11%, SEA 11%, Europe 6%, America 5%, Oceania 1% Passengers Carried : 14% (Korea Outbound 19%, Overseas 10% ) 4Q Business Outlook & Plan Expect increase in outbound demand while revenue growth slow down with diminished MERS base effect Plan to manage capacity flexibility with charter flights New route : Expanded routes : Reduced routes : Incheon Delhi (5 flights/week) Incheon Las Vegas, Jeju Osaka Incheon Niigata/Nagoya, Jeju Narita 10

11 Cargo Traffic Cargo (International + Domestic) 3Q15 YoY Capacity (Mil AFTK) 2,590 2, % JUL % AUG % SEP % Traffic (Mil FTK) 1,973 2, % JUL % AUG % SEP % L/F (%) 76.2% 75.6% -0.6%p Yield (KRW) % Yield (US Cent) % 11

12 Cargo Revenue by Route Operations [billion KRW] Q15-5% % -20% -5% +8% +3% -5% Domestic Japan China SEA Oceania America Europe [Revenue : Routes] [Revenue : Regional Sales] America 43% Oceania 1% SEA 14% Europe 27% Japan 4% China 10% Domestic 1% America 14% SEA 16% Europe 12% China 24% Korea 26% Japan 8% 12

13 Cargo Business Overview 3Q Business Summary Traffic(FTK) Changes : America 4%, SEA 4%, China 2%, Japan 2%, Europe 0%, Oceania 1% Total Tonnage of Carried : 2% (Korea Outbound 6%, Overseas 4% ) 4Q Business Plan Improve profitability by attracting high-yield cargo items Provide flexible capacity and reduce cost by using belly space of passenger aircraft 13

14 Operating Expense Breakdown 3Q15 (2,587 billion KRW) ( 2,609 billion KRW) Rentals 2% Commissions 3% In-flight Service 4% Maintenance 2% Fuel 27% Airport related 11% Labor 17% Depreciation 16% Others 18% Rentals 3% Commissions 3% In-flight Service 4% Maintenance 3% Fuel 22% Airport related 12% Labor 17% Depreciation 17% Others 19% 14

15 Key Expenses 3Q15 (billion KRW) Changes Amount Ratio Fuel % Labor % Depreciation % Airport related % In-flight Service % Commissions % Maintenance % Rentals % Others % Total 2,587 2, % 15

16 Fleet Status (As of Sep. 30 th, 2016) Type Aircrafts Delivery (Month) A A B B747-8I 7 B B Passenger Total 130 B F 16 B747-8F 6 12 B777F Cargo Total 30 4 Total

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