Korean Air Lines reports record profit in 2022 as cargo booms

Korean Air's Boeing 787-9 [KOREAN AIR]

Korean Air Lines reported a record net profit of 1.78 trillion won ($1.44 billion) in 2022, up 179 percent.

It missed a market forecast of 1.88 trillion won compiled by market tracker Company Wise.

Revenues stood at a fresh high of 13.41 trillion won, up 53 percent from the previous year, below the consensus of 13.98 trillion won, while the operating profits skyrocketed 97 percent to reach 2.88 trillion-won, also a record and below the consensus of 2.92 trillion won.

Freight operations continued to be a major factor driving profits through the third quarter in 2022. Its passenger business also started to recover fueled by growing air travel demand as border measures eased since the second half of last year.

Fourth quarter performance weakened as cargo revenues started falling.

According to Korean Air, revenues in the fourth quarter of last year rose 28 percent year-on-year to 3.6 trillion won, but operating profit fell 26 percent to 520.1 billion won. Sales of the cargo business in the fourth quarter were 1.54 trillion won, down 29 percent from the fourth quarter of 2021.

“This comes as air cargo demand waned amid global economic slowdown, as well as a drop in freight rates,” Korean Air explained in a statement.

Sales of the passenger business in the fourth quarter of 2022 more than tripled at 339 percent year-on-year to 1.66 trillion won in October last year, following Japan’s visa-free entry measures and increased travel demand to Southeast Asia and Oceania at the end of the year.

This is the first time the quarterly passenger revenue exceeded cargo revenue since the second quarter of 2020, when the Covid-19 pandemic was in full swing, the company said.

“We believe that the cargo business will continue to wane in the first quarter of this year due to the global economic slowdown, while the passenger business is expected to see a gradual increase in demand,” Korean Air said.

“We will lay the foundation for mid- to long-term growth while preparing for the integration of Asiana Airlines,” it added.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]