Korean Air reported an increase in profits for the second quarter, despite a slight dip in revenue, driven by network adjustments and capacity management.
Revenue while relatively flat, was at a negative 0.9%, down to 4 trillion Korean won, or $3bn, for the second quarter. However, passenger revenue was down 2% in the quarter. Operating profit dipped 3.5% to 399bn won ($294.2 million). Net income jumped 13.4% to 395.9bn won ($291.9 million) in the period.
“Despite concerns of a broader economic slowdown stemming from global trade tensions, the airline maintained stable revenue,” said Korean Air in a statement.
The dip in operating profit was driven by increased operating expenses despite lower fuel prices.
“Nonetheless, key profitability indicators remained steady, driven by proactive network adjustments during the seasonal off-peak period and a surge in demand during the early May holiday period,” the airline added.
However, for the first half of the year, net profits were down 15% to 589.1bn won ($434.3 million), while revenues were up 1% to 7.9 trillion won ($5.9bn). Operating profits in the first half were down 12% to 749.9bn won ($552.9 million).
For the third quarter, the company expects strong passenger demand for the summer season and plans to “maximise revenue through dynamic capacity management on key routes".
Cargo revenue in the quarter was down 4% in the quarter. The airline said it “navigated market volatility” caused by US tariff policies by “diversifying its product offerings” and focussing on high-yield cargo such as semiconductors, batteries, and solar cells, along with seasonal perishables.
Korean Air's network flexibility and market responsiveness is expected to strengthen in the third quarter. This will "ensure stable profitability" amid ongoing economic uncertainty.