Korean Air (003490.KS) posted record second-quarter revenue despite a deteriorating business environment in the airline industry caused by high oil prices stemming from the Middle East war. By reporting operating profit that far exceeded market estimates, the carrier is seen as having succeeded not only in top-line growth but also in defending profitability.
Korean Air said in a regulatory filing on the 13th that it recorded preliminary second-quarter revenue of 5.0199 trillion won and operating profit of 261.8 billion won on a separate basis.
Revenue rose 26% from 3.9859 trillion won a year earlier, marking the highest ever for a second quarter. Operating profit fell 34% from a year earlier, but delivered an "earnings surprise," coming in nearly 200 billion won above the securities industry estimate of 62.4 billion won.
For the first half of this year, revenue reached 9.535 trillion won, up 20% from 7.9418 trillion won a year earlier. Operating profit rose 4% to 778.7 billion won from 749.9 billion won in the first half of last year.
The airline industry had expected carriers' second-quarter results to deteriorate significantly as international oil prices surged from March due to the Middle East war. However, Korean Air succeeded in maximizing profitability as solid passenger demand was joined by a sharp increase in cargo transport demand for high-value products such as semiconductors and cosmetics.
Second-quarter passenger business revenue totaled 2.8479 trillion won, up 451.4 billion won from the same period a year earlier. While passenger demand originating from Korea contracted somewhat due to rising oil prices, the increase was largely driven by growing transit demand in the Middle East region and inbound demand to Korea. Korean Air expanded capacity on major routes to meet the increased demand.
Cargo business revenue reached 1.5419 trillion won, up 486.5 billion won from the same period a year earlier. Air cargo volume increased significantly as demand for semiconductor transport, which rose on expanded global artificial intelligence (AI)-related investment, was compounded by strong K-beauty exports. Korean Air actively attracted high-value cargo and operated flexible routes, including charter flights.
Korean Air expects passenger demand to rebound in the third quarter due to a recovery in travel sentiment following a reduction in fuel surcharges and the summer peak season effect. In particular, the company projects that profitability will improve significantly through two-way demand, as passenger demand originating from Korea recovers while inflows of overseas demand continue.
"For the cargo business, we plan to secure a stable profit base by actively attracting growth demand such as AI-related businesses," a Korean Air official said. "We will nimbly adjust capacity in line with changes in the external environment to maximize revenue and profit."
