Korean Air plans to make 16 trillion won in sales by 2023

Korean Air unveiled its mid-term business strategy Tuesday, saying it aims to record 16.2 trillion won ($14.4 billion) in sales by 2023.

The goal comes as the airline’s March shareholders’ meeting draws near. Korean Air Chairman Cho Yang-ho’s term at the country’s largest airline ends this year and shareholders will vote on his re-election.

To achieve the sales target, it needs to grow by an average 5.1 percent every year. Last year, the airline inked 12.7 trillion won in sales.

Its operating profit target for 2023 is 1.7 trillion won, about 2.5 times more than last year’s 692.4 billion won.

The company said it will work to raise the profitability of its business to reach a 10.6 percent profit to sales ratio. Last year, the ratio stood at 5.5 percent. Along with improved profits, the company plans to lower its debt ratio to below 400 percent from last year’s 699 percent.

To expand sales, Korea’s largest full-service carrier plans to expand routes connecting America and Asia through a joint venture inked with U.S. airline Delta Air Lines last year. The partnership enables the two companies to share revenue, costs, flights and sales networks with antitrust immunity on their trans-Pacific operations.

The airline also plans to open up new flight routes headed to Europe and Southeast Asia, both growing as popular travel destinations.

As for its cargo business, the airline plans to bolster its business with emerging markets like Vietnam, India and Central and South America.

In the aerospace business, the company said it will develop new technologies to build parts for passenger aircraft and start mass producing unmanned aerial vehicles to secure future growth engines.

This year, Korean Air proposed a target of 13.2 trillion won in revenue and 1 trillion won in operating profits.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]