By Kim Hyun-bin
Korean Air and Asiana Airlines performed better than expected in the first quarter of the year on the back of their robust cargo transport businesses, but Jeju Air and other low cost carriers (LCCs) in Korea continued to lose money due to the stagnant passenger flight numbers amid the prolonged COVID-19 pandemic, according to industry analysts, Tuesday.
Korean Air recorded 2.8 trillion won in sales ($2.19 billion) and 788.4 billion won in operating profit during the January to March period. This is an increase of 60 percent and 533 percent, respectively, compared to the same period last year. The net profit for the year went into the black by recording 543.9 billion won.
In the first quarter of this year, cargo route sales recorded 2.14 trillion won. The company focused on maximizing sales by increasing cargo planes. In the first quarter of this year, passenger route sales increased 128 percent from a year earlier to 359.8 billion won due to the easing of entry restrictions in foreign countries.
Asiana Airlines recorded record-high earnings in the first quarter with rising demand for its cargo business. Sales increased by 46.4 percent to 1.14 trillion won. Operating profit went into the black with 176.9 billion won and a net profit of 36.4 billion won. In the first quarter, the cargo business recorded 884.3 billion won in sales, up 45 percent from the same period last year.
From the second quarter, the LCC's performances are forecast to improve as the number of travelers recovers due to the easing of quarantine measures. However, it will be difficult to turn turn a profit due to a rise in the exchange rate and crude oil prices.
"The overall cost is expected to increase due to the increase in fuel costs and variable costs," Jung Yeon-seung, a researcher at NH Investment & Securities said. "Despite the price burden, potential demand is high, so sales of new travel products and the reservation rate will continue to increase"
LCCs such as Jeju Air, Jin Air, and T'way Air remain in deficit
Jeju Air recorded 81.2 billion won in sales in the first quarter, up 94.3 percent from the same period last year but still stood at a loss of 78.9 billion won.
Jin Air recorded an operating loss of 46.4 billion won, while Air Busan recorded an operating loss of 36.2 billion won and T'way Air recorded an operating loss of 39 billion won.