Korean Air, announcing its annual accounts, indicated that it expects demand will continue to recover even if customers are experiencing economic headwinds.
The South Korean carrier finished 2022 with a net profit of KRW2.88 trillion ($2.3 billion), with revenues growing continuously throughout the year. At the end of 2022, Korean Air netted KRW13.4 trillion ($10.9 billion) of revenue, as it continued to expand its network with borders reopening across Asia and Oceania.
However, KAL’s cargo business has entered a downturn due to the slowing global economy, forcing the company to strengthen its profit management by responding to falling yields. But Korean Air sees an opportunity in China, where the end of the zero-COVID policy could result in the normalization of manufacturing within the county.
Passenger services remain a bright spot for the Seoul, South Korea-based carrier, as “despite concerns about high interest rates and economic downturn, passenger demand is to increase with the transition into the endemic period”. The company highlighted the Americas/Europe, South East Asia, and Japan as some of the markets where demand is strong or is gradually increasing. The recovery of travel from/to China is still delayed because strict restrictions remain, KAL added.
Furthermore, the airline wants to complete the takeover of Asiana Airlines, another South Korean carrier. According to a letter to staff written by Korean Air CEO Walter Cho in early January 2023, the airline expects multiple regulators to finally approve the merger throughout the year. The new company, still using Korean Air’s branding, would begin operations in 2024.
In 2022, Korean Air grew its fleet by a single aircraft: retiring one Boeing 747-8I, two Boeing 777, and two Boeing 737s and welcoming five Boeing 737 MAX-8 and one Airbus A321neo aircraft.
Responding to passenger demand, it also began reactivating its Airbus A380s, of which it currently owns 10. Five are still parked at Incheon International Airport (ICN), while the latest double-decker to be reactivated was registered HL7622, which returned to service in November 2022.
