Korean Air reports 5 percent increase in Q1 operating profit

Korean Air's B777-300ER [KOREAN AIR LINES]

Korean Air reported a first quarter operating profit of 436.1 billion won ($323.8 million), an on-year increase of 5 percent driven by recovery in passenger traffic and robust cargo demand, in its electronic disclosure filed Wednesday.

The reported operating profit fell short of market expectations, underperforming 522.6 billion won anticipated by market tracker FnGuide.

The carrier reported a 20 percent on-year increase in its first quarter revenue, which reached 3.82 trillion won, missing the market consensus of 4.26 trillion won.

Net profit for the January–March period decreased by 3 percent on year to 345.2 billion won, surpassing the market consensus of 254 billion won.

Passenger business revenue increased 32 percent on year to 2.34 trillion in the first quarter.

Korean Air highlighted the nearly full recovery of its network capacity to pre-pandemic 2019 levels, with the exception of Chinese routes. The company attributed profitability improvements to its capacity expansion on Southeast Asia and Japan routes in response to strong tourism demand.

On the cargo front, revenue fell slightly to 996.6 billion won. The decline reflects stabilization in the global air cargo market, the company said.

Looking ahead to the second quarter of 2024, Korean Air said, “The airline’s passenger business will prioritize route profitability amid the expansion of global capacity and intensified competition.

“The cargo business will capitalize on the growing e-commerce demand from China by strengthening client partnerships and allocating capacity on key routes,” it added.

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