Korean Air’s revenues got a huge boost in Q3 from the removal of pre-arrival mandatory Covid testing in South Korea and the relaxation of other travel restrictions. Revenues grew by almost 65 percent to KRW 3.7 trillion, up from KRW 2.2 trillion in the same quarter of 2021. Korean Air benefits from relaxation of travel restrictions.

Passenger revenues increased by even 338 percent to KRW 1.45 trillion from KRW 331.9 billion. Revenue passenger kilometers (RPK) were up by 301.1 percent to 10.319 million. Revenues to the Americas were up by 285 percent year on year, while sales to the Americas accounted for 48 percent of all of Korean Air’s sales. The share of South East Asia increased to twenty percent, with revenues up by 1024 percent over 2021 when the region was almost absent. Europe accounts for sixteen percent of the carrier’s sales in Q3. By route, domestic sales were at nine percent of all sales but sales by region, Korea dominated at 54 percent.

Cargo revenues were up by two percent to KRW 1.9 trillion as yields remained high, but demand was lower during the quarter as more belly capacity became available on passenger flights. A decrease in consumer spending due to inflation and seasonal trends have also contributed to the reduced cargo demand”, Korean says in its earnings release. The reduced demand is expected to continue in the current fourth quarter, which traditionally is the strongest of the year. The airline is expecting a further economic slowdown.

Korean Air’s operating expenses increased by 58.2 percent to KRW 2.8 trillion, with fuel expenses up by 142.8 percent to KRW 1.1 trillion. This was caused 82 percent by higher fuel prices, while sixteen percent came from more flying activities. The latter also affected non-fuel costs, especially labor, which was up 27 percent to KRW 1.6 trillion.

Revenues minus expenses resulted in an operating profit of KRW 839.2 billion compared to KRW 438.6 billion in the third quarter of last year. Including interest expenses and a hefty KRW 399.8 billion loss on currency costs, Korean Air ended the quarter with a KRW 431 billion net profit compared to KRW 134 billion in 2021. The carrier has KRW 5.4 trillion in liquidity at its disposal and total liabilities of KRW 20 trillion. Korean returned to profitability in 2021.

Korean Air is seeing strong demand for long-haul flights to North America and Europe, while transit traffic between South East Asia and North America also looks good. Japan benefits from visa-free entry, but China is still mostly closed and restricted to only essential traffic. “With a grim market outlook on inflation, weakened currency, and high-interest rates, Korean Air will continue to address external challenges and minimize their impact.”

The airline ended September with 155 aircraft, including 23 full freighters. It took delivery of five Boeing MAX 8s this year to date and phased out two 737NGs, one 747-8I, and one 777.

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Active as journalist since 1987, starting with regional newspaper Zwolse Courant. Grand Prix reporter in 1997 at Dutch monthly Formule 1, general reporter Lelystad/Flevoland at De Stentor/Dagblad Flevoland, from 2002 until June 2021 radio/tv reporter/presentor with Omroep Flevoland.
Since mid-2016 freelance aviation journalist, since June 2021 fully dedicated to aviation. Reporter/editor AirInsight since December 2018. Contributor to Airliner World, Piloot & Vliegtuig. Twitter: @rschuur_aero.

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