[Click eStock] "Korean Air Anticipates Boost from Chuseok and Visa-Free Chinese Tourists"

On September 22, Hana Securities analyzed that Korean Air’s third-quarter revenue is expected to decrease despite the passenger peak season, as the “golden holiday” has been deferred to the fourth quarter. However, the firm forecasted solid performance in the fourth quarter, citing the effects of the Chuseok holiday and visa-free entry for Chinese group tourists. The investment opinion remains “Buy,” and the target price is maintained at 30,000 won.

Korean Air’s standalone third-quarter revenue is estimated at 4.219 trillion won (down 1% year-on-year), with operating profit at 445 billion won (down 28%). Demand for Japan and Southeast Asia turned weak in the third quarter, and the average international airfare fell by 7% due to the high fare base in the third quarter of last year. Cargo revenue is also expected to decline by 4%. Following the abolition of the U.S. de minimis exemption, cross-border e-commerce cargo volume has decreased, and a contraction in cargo volume is seen as inevitable for the time being.

Subsidiaries’ performance expectations are also being lowered. Ahn Dohyun, a researcher at Hana Securities, said, “The cargo division of Asiana Airlines has been separated and sold, and due to weak demand for Japan and Southeast Asia, it is difficult for low-cost carriers to benefit from the peak season.” He estimated consolidated third-quarter revenue at 6.3 trillion won and operating profit at 403 billion won. The 2025 revenue estimate was revised down to 25.5 trillion won, with operating profit at 1.62 trillion won. According to Ahn, this reflects both the overall weak seasonal demand in the aviation industry and the downward revision of subsidiary performance.

A rebound is expected in the fourth quarter, driven by the Chuseok holiday and visa-free entry for Chinese group tourists. Ahn stated, “As long as the visa-free policy between Korea and China continues, it is reasonable to expect Chinese route revenue to exceed pre-COVID-19 levels.” He projected international passenger revenue to increase by 14% in the fourth quarter. However, he added, “In the cargo segment, with the abolition of the U.S. de minimis exemption, revenue is expected to decrease year-on-year.” Standalone fourth-quarter revenue is estimated at 4.3 trillion won (up 6%), with operating profit at 419 billion won (down 4%).

Ahn emphasized, “From the perspective of the integrated Korean Air, it is more important to focus on standalone performance rather than consolidated results at this time. The key is how many routes the company has secured where additional competitors face entry barriers.” He added, “Korean Air holds a dominant position not only on routes to North America and Europe but also to China, and the implementation of visa-free travel between Korea and China could further highlight this route competitiveness.”

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