Korean Air recorded an operating profit for a fifth consecutive quarter thanks to its continuous efforts to boost cargo operations and reduce costs, despite the drop in passenger demand caused by the COVID-19 pandemic. Compared to the second quarter in 2020, revenue increased by 16% to KRW 1.9508 trillion (USD 1,726 million) and operating profit rose by 31% to KRW 196.9 billion (USD 174 million).
The cargo business achieved a revenue of KRW 1.5108 trillion, the highest number in the airline’s history. Its strong performance can be attributed to the increase in company restocking demands in preparation for the economy’s recovery and rise in emergency supply shipments due a capacity shortage in the shipping industry. In addition, a lack of passenger flight belly cargo capacity due to the slow recovery of the passenger market led freight rates to remain high.
Although passenger demand remains low due to the spread of COVID-19 variants, Korean Air states that it continues to work to secure demand by operating international charter flights and its domestic routes to/from Jeju.
Many uncertainties surround the air cargo market in the second half of the year, as worldwide vaccination rates increase and fear of COVID-19 variants spread. However, KAL states that cargo demand for IT and e-commerce will stay strong due to the recovering economy and boost in company restocking needs. Korean Air will continue to maximize its profit by utilising its freighters and cargo-only passenger aircraft throughout its strong global network.
Passenger demand is expected to be sluggish in the second half of the year, and it is also difficult to predict when it will recover, adds the airline. Korean Air’s passenger business will “operate its international routes flexibly while closely monitoring the market situation, including travel restrictions of major hub cities, vaccination rates, application of digital health passes, and new travel bubbles”.