Korean Air Boeing 787-10
In response to the slowdown in outbound domestic traffic due to higher fuel prices and exchange rates, Korean Air is trying to attract extra inbound and transit traffic to Korea. The airline has also implemented cost reductions this month to offset escalations to “strengthen its financial structure and build a more resilient foundation for long-term growth.”
Korean Air reported the Q1 results on Monday. The year started pretty well, with revenues up 14.1 percent year over year to KRW 4.52 trillion. Passenger revenues were up 7.3 percent to KRW 2.61 trillion, of which KRW 2.51 trillion was from international destinations (Europe, Japan, the US) and just KRW 103 billion from domestic destinations. Cargo revenues grew by 3.5 percent to KRW 1.09 trillion.
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Start My Test Flight →While expenses (notably non-fuel costs) were 10.9 percent higher to KRW 4.0 trillion, the operating profit improved by 47.3 percent to KRW 517 billion, although the negative operating margin widened to 11.4 percent. The KRW 243 billion net profit was up 49.5 percent compared to 2025.
The situation changed drastically in the last month of Q1, as oil and jet fuel prices soared following the Iran crisis. This has exerted downward pressure on global traffic, with demand in Korea further affected by fuel charges and unfavorable exchange rates. As Koreans have become reluctant to travel, Korean Air hopes to offset this by focusing on inbound traffic.
US summer
The airline is “actively absorbing inbound and transit demand during the US summer vacation season.” Inbound demand from the US and transit demand on eastern US routes remain solid. Korean Air is also seeing strong transit demand at Seoul Incheon, now that Gulf carriers are operating at reduced capacity. Demand for China and Japan remains strong, although yields to and from Japan are affected by fierce competition.
On April 1, Korean Air activated the so-called Emergency Management System, “proactively responding to external factors; fuel prices, exchange rates, and market supply conditions. Optimizing internal cost efficiency with safety as the top priority.”
Korean Air Cargo “will target seasonal volumes and high-growth sectors, including AI-related industries and K-beauty.” Rising oil prices and uncertainties over US tariffs result in unstable market conditions.
The carrier ended the first quarter with 166 aircraft, one more than in December. It took delivery of two Boeing 787-10s, and one Airbus A350-900, but retired an A380 and a 777.
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