[Click eStock] "Jeju Air, When Will Passenger Recovery Begin?"

[Image source=Yonhap News]

[Asia Economy Reporter Jihwan Park] Ebest Investment & Securities evaluated on the 6th that Jeju Air needs to wait for passenger recovery first in order to normalize its performance.

Jina An, a researcher at Jeju Air, explained, "The consolidated performance for the second quarter recorded sales of 36 billion KRW and an operating loss of 84.7 billion KRW," adding, "Sales decreased by 88.5% compared to the previous year, and the operating loss continued due to the deficit."

Researcher An said, "Due to the prolonged COVID-19 pandemic, both sales and operating losses continued to perform poorly following the first quarter," and added, "Domestic RPK also showed monthly improvement starting from the low point in April." However, amid restrictions on overseas travel and intensified competition for domestic market share, the unit fare for domestic routes in the second quarter fell by 35% compared to the same period last year.

As of the second quarter, cash and cash equivalents are expected to be around 100 billion KRW. It is forecasted to maintain a similar level as in the first quarter due to continued cost reductions such as labor costs, fuel costs, and rent deferrals, along with an increase in short-term borrowings.

Researcher An explained, "The resolution of the risk factor regarding the acquisition of Eastar Jet, continued cost reductions, and the arrival of the domestic peak season are positive factors for third-quarter performance."

He added, "In the absence of international demand and sales momentum, costs related to lawsuits for the refund of deposits due to the failed acquisition of Eastar Jet, the sustainability of rent deferrals, and the expiration of government employment retention subsidies are burdensome factors."

This content was produced with the assistance of AI translation services.