Korean Air Recovers Credit Rating to A Grade After 8 Years with 'Financial Structure Improvement'

Korean Air, having succeeded in improving its financial structure, has regained an A credit rating after 8 years. At the same time, it received a high rating in ESG (Environmental, Social, and Governance) management evaluated by the Korea ESG Standards Institute (KCGS), gaining market recognition for its non-financial performance indicators as well.

On the 27th, Korean Air announced that its credit rating by Korea Ratings had been upgraded from BBB+ to A-. This marks a return to the A rating for the first time since December 2015, 8 years ago.

The improvement in Korean Air’s credit rating is attributed to ▲ the normalization trend of its core international passenger business ▲ maintaining solid profit-generating capacity despite unfavorable external factors such as a slowdown in the cargo market and high oil prices ▲ expansion of financial capacity and the expectation of maintaining significantly improved financial stability even after the acquisition of Asiana Airlines.

With this credit rating upgrade, Korean Air will be able to secure investment demand from new institutional investors. Capital raising through corporate bond issuance is also expected to become easier. A Korean Air official explained that it is encouraging that the company has been evaluated as having strengthened its financial resilience to withstand challenges even after acquiring Asiana Airlines.

Meanwhile, Korean Air has achieved an 'Integrated Grade A' for the fourth consecutive year in the 2023 ESG evaluation of listed companies recently announced by the Korea ESG Standards Institute (KCGS).

High evaluations were received for its board-centered ESG management system, mid- to long-term dividend policy enhancing shareholder value, strengthened compliance management, fostering coexistence with local communities, consumer rights and information protection, and establishing a corporate culture and recruitment considering diversity. Among these, the Social (S) category improved by one grade to A+ compared to last year.

The Korea ESG Standards Institute is the largest ESG evaluation and proxy advisory organization in Korea. It conducts evaluations, research, and surveys on corporate governance and social responsibility. Every year, it announces ESG evaluations and ratings based on the levels and results of Environment (E), Social (S), and Governance (G) for listed companies in Korea.

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