Korean Air's Q2 Operating Profit Down 36% YoY Due to Increased Operating Costs

Korean Air's operating profit for the second quarter of this year recorded 468 billion KRW, a 36% decrease compared to the same period last year. Although revenue increased due to the rise in passenger demand following the COVID-19 endemic, profitability worsened compared to last year as various costs, including airport and flight operation expenses, also increased.

On the 2nd, Korean Air announced that its second-quarter revenue this year rose 6% year-on-year to 3.5354 trillion KRW, while operating profit fell 36% to 468 billion KRW. Net profit also decreased by 18% year-on-year to 371.5 billion KRW.

Passenger revenue reached 2.221 trillion KRW, a 154% increase compared to the previous year. This was the result of proactively increasing supply by about 20% compared to the previous quarter in anticipation of rising demand due to the endemic.

On the other hand, cargo revenue was 963.8 billion KRW, down 56% compared to the same month last year. This was due to an increase in cargo space under passenger aircraft as the passenger business normalized, and a decline in cargo rates caused by reduced air cargo demand.

[Image source=Yonhap News]

Passenger business performance is expected to improve in the third quarter as well, with the peak seasons of summer vacation and the Chuseok holiday. Korean Air stated, "We will expand irregular flights to popular vacation destinations and strategically increase supply on routes expected to have concentrated demand to maximize profits."

Regarding the cargo business, competition is expected to intensify and freight rates to decline in the third quarter due to weak demand caused by the global economic slowdown and increased cargo space under passenger aircraft.

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