Korean Air Posts Operating Profit of 7.6 Billion KRW in 3Q... Avoids Loss Thanks to Cargo

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] Korean Air announced on the 5th that its preliminary figures for the third quarter showed sales of 1.5508 trillion KRW and an operating profit of 7.6 billion KRW. Although sales decreased by 53% and operating profit by 94% compared to the previous year, the company avoided turning to a loss.

First, cargo business sales, which have recently become a lifeline for the airline industry, reached 1.0163 trillion KRW, surpassing 1 trillion KRW for two consecutive quarters. The company explained that this was the result of increasing cargo aircraft utilization rates and improving load factors amid a prolonged COVID-19 pandemic, which caused a decrease in cargo supply and sustained strong freight rates.

Korean Air added, "By being the first in the country to remove passenger seats and load cargo within the seats, we increased cargo supply capacity and improved profitability through fuel cost savings due to reduced aircraft weight."

The passenger business continued to struggle due to the COVID-19 situation. However, the company explained that there was a slight improvement compared to the second quarter due to the gradual resumption of flights mainly on medium- and long-haul routes such as North America and Southeast Asia.

Korean Air expects that although passenger demand will inevitably decline in the fourth quarter due to COVID-19, cargo demand will increase further as the cargo business enters its peak season. In particular, in addition to traditional air cargo demand such as semiconductors, automotive parts, and e-commerce shipments, high value-added cargo is expected to increase, including urgent quarantine demand due to the resurgence of COVID-19 and a shift to air transport caused by container ship and other maritime supply shortages.

Meanwhile, Korean Air has been operating a dedicated vaccine transport task force (TF) since September, following analyses from various expert organizations predicting large-scale transportation alongside the full-scale production of COVID-19 vaccines early next year. Korean Air stated, "Through the TF team, we are conducting pre-inspections across the entire pharmaceutical transport process, including storage facilities and equipment, and are closely collaborating with global pharmaceutical logistics partners," adding, "Furthermore, based on our cargo transport infrastructure and know-how certified for pharmaceutical transport capabilities, we plan to contribute to the rapid and stable distribution of vaccines."

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