[Click eStock] "Jin Air to Accelerate Earnings Turnaround with Southeast Asia Route Recovery"

[Asia Economy Reporter Kwon Jae-hee] Meritz Securities on the 7th gave Jin Air a 'Hold' investment rating and set a target price of 19,000 KRW.

Jin Air's first-quarter revenue is expected to be 84.3 billion KRW, with an operating loss of 48.9 billion KRW. Revenue has recovered to 29.1% compared to the first quarter of 2019.

Researcher Bae Gi-yeon of Meritz Securities said, "We consider the third quarter of 2024 as the normalization period of the passenger market and expect an annual operating profit turnaround."

However, it is expected that the turnaround period will be brought forward due to the strength of Southeast Asian routes. If the recovery of target routes for low-cost carriers (LCCs) such as Japan and China is delayed, travel demand is expected to concentrate on the Southeast Asian region. The Southeast Asian routes were a key area accounting for 66.1% of Jin Air's international route revenue before the COVID-19 pandemic.

The government's efforts to normalize international routes are also cited as a factor accelerating the recovery of Southeast Asian routes. On the 6th, the government announced a goal to recover 50% of international flights by the end of 2022 through the 'International Flight Gradual Return to Normal Plan.' The Ministry of Land, Infrastructure and Transport stated that it will promote the normalization of international flights focusing on routes where rapid passenger demand recovery is expected, considering the openness of counterpart countries' aviation policies. Therefore, it is highly likely that normalization will be promoted mainly on Southeast Asia, the Americas, and Europe routes where the airways are physically open.

Researcher Bae analyzed, "The key is the recovery mainly on Southeast Asian routes and the stabilization of international oil prices at around 60 to 70 dollars per barrel based on West Texas Intermediate crude oil," adding, "If only the Southeast Asian region recovers, there is a high possibility of exceeding expectations."

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