[Click eStock] "Korean Air, Continued Strength in Freight Rates"

NH Investment & Securities analyzed on the 3rd that for Korean Air, the strong fare trend is expected to continue throughout the year due to route supply constraints. The investment opinion of Buy and the target price of 36,000 KRW were maintained.

Korean Air recorded separate basis 2nd quarter sales of 3.5354 trillion KRW and operating profit of 468 billion KRW. Compared to the same period last year, sales increased by 6.1%, but operating profit decreased by 36.4%.

In the case of passengers, international route supply in the 2nd quarter increased by 21% compared to the previous quarter. Also, fares rose by 2%, resulting in a significant increase in international route sales. Jeong Yeonseung, a researcher at NH Investment & Securities, said, "Sales increased mainly on medium- to long-haul routes due to increased demand for travel to Europe and transfer demand on trans-Pacific routes," adding, "Although labor and airport-related costs increased due to increased transportation volume, the strong performance in the passenger sector offset the cost increase."

NH Investment & Securities expects the strong fare trend to continue in the 3rd quarter, which is the peak season for passengers for Korean Air. He said, "Passenger supply in the 3rd quarter is expected to increase by 8% compared to the 2nd quarter," adding, "Although the supply increase pace is slower than expected, fare strength is expected to continue throughout the year due to ongoing supply constraints on medium- to long-haul routes." He also added, "Although the 3rd quarter is the off-season for cargo, container freight rates have recently rebounded, and cargo volume is gradually improving, so the decline in cargo freight rates is expected to narrow."

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