Korean Air expects passenger demand to stay strong for next few months

Korean Air remains optimistic about passenger demand, yet is muted on the future of cargo fares
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Korean Air expects to still see robust travel demand over the next few months, which will help the airline achieve even better results in Q3 2023. 

The Korean carrier stated in its Q2 2023 release that it expects to end Q3 2032 with even “stronger results” owing to “robust travel demand during summer and autumn Chuseok (Korean Thanksgiving) holiday peak seasons”.  

Korean Air said it will try “to maximize revenue by expanding operations to popular vacation destinations and flexibly increasing capacity on routes where high demand is expected”.  

During Q2 2023, the airline earned KRW3.5 trillion ($2.6 billion) in revenue, which resulted in an operating profit of KRW468 billion ($356.5 million) and a net income of KRW371.5 billion ($283 million). The Year-on-Year (YoY) passenger revenue growth of 154% was a result of the airline increasing its Quarter-on-Quarter (QoQ) capacity by 20%. 

However, cargo revenues decreased by 56% YoY to KRW 963.8 billion ($742.5 million) due to declining air freight demand, as well as increasing belly cargo capacity as more airlines restore international capacity, resulting in dropping cargo rates. 

Korean Air anticipates that in Q3 2023, its cargo business will continue to suffer from intensifying competition and further slipping rates as the global economy slows down. However, the carrier said it will “proactively work to procure new freight demand and efficiently manage operations for increased revenue”. 

Interestingly, the share of sales of flights to Europe has grown by 10% YoY, while the share of tickets to the Americas dropped by 11%. However, the Americas remain a cash cow for Korean Air, earning the airline almost double the revenue compared to flights to Europe. 

The airline ended the period with one additional aircraft compared to the start of 2023, after it phased out one Boeing 737 and a pair of 777s and added four A321neos. In total, Korean Air operated 133 aircraft as of June 6, 2023. 

The airline took delivery of an additional A321neo, registered as HL8530, on July 21, 2023, according to ch-aviation.com data. It has not entered commercial service yet and remained inactive after arriving at Seoul Incheon International Airport (ICN). 

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