[Click eStock] "Korean Air, Continued Benefits from Booming Air Cargo Market"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Due to the booming air cargo market, Korean Air is expected to continue its record-breaking performance.

According to Daishin Securities on the 8th, the consolidated operating profit for the fourth quarter is expected to reach 538.3 billion KRW, a 346% increase compared to the same period last year, marking an all-time high. Sales are expected to increase by 42% to 2.7059 trillion KRW.

With the normalization of international passenger flights delayed due to the emergence of COVID-19 variants, the peak season for cargo and strong exports of semiconductors, mobile phones, and other products have sustained the cargo boom. At Incheon Airport, air cargo handling volume for October and November reached 572,600 tons, a 9.9% increase compared to a year earlier, while Korean Air's air cargo handling volume during the same period rose by about 10.3% to 268,700 tons.

Looking at major export items from South Korea last month, semiconductors increased by 40.1% compared to the same period last year, wireless communication by 16.5%, computers by 73.5%, and textiles by 17%, contributing to the increase in air cargo volume. Ji-hwan Yang, a researcher at Daishin Securities, said, “Due to tight supply and demand, the cargo yield in the fourth quarter is expected to reach 724.3 KRW per kilogram, a 31.3% increase compared to the same period last year.”

According to IATA data, compared to the pre-COVID-19 period in 2019, air cargo supply has decreased by about 8%, while demand has increased by about 10%, resulting in a supply shortage of approximately 18%. On the other hand, with the Delta variant followed by Omicron and the uncertainty of future variants, it is difficult to predict when international flights will return to normal.

Researcher Ji-hwan Yang said, “Despite expectations of record profits, the stock price has not reflected this due to vague hopes for passenger normalization and concerns over fare declines caused by increased passenger cargo transport. It is expected that international passenger normalization will remain difficult in 2022, and the air cargo market is likely to continue its boom.”

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