Korean Air announced it achieved a record-high revenue of KRW 14.5751 trillion (US$11.3 billion) in 2023, with an operating profit of KRW 1.5869 trillion (US$1.23 billion). The airline also achieved a record-high quarterly revenue of KRW 3.9801 trillion (US$3.09 billion) in its fourth fiscal quarter.
Korean Air’s cargo business performed strongly during the pandemic due to global supply chain issues, ocean freight bottlenecks, and limited aircraft belly cargo capacity. However, with the recovery of the air cargo industry post pandemic, cargo operating profit decreased year-on-year.
For the full year of 2023, Korean Air reported a higher operating profit compared to 2019. The airline’s 2023 operating profit margin was 10.9%, a higher rate than the industry average. The fourth quarter’s year-on-year decrease in operating profit is a result of an increase in staff wages that included incentives for achieving annual performance and safety performance targets.
Annual passenger business revenue increased compared to 2019, driven by strong travel demand and higher premium class demand despite network capacity only recovering to 80 percent of pre-pandemic levels. In the cargo sector, while revenue decreased due to the rebound of passenger belly cargo capacity and the normalization of ocean freight, a higher level of profitability was maintained compared to 2019.
Korean Air anticipates passenger demand and capacity to fully recover in Q1. Long-haul demand is expected to remain robust, and the airline forecasts the recovery of tourism demand during the peak winter season to boost revenue. Korean Air will maximise revenue by resuming routes and increasing capacity to popular tourist destinations in Southeast Asia and Japan.
In Q1, rebound of air cargo demand for traditional items, such as semiconductors, automobiles and displays, remains uncertain due to the weakened global economy. The airline aims to respond flexibly to the ongoing robust demand in e-commerce that has carried over from the end of last year, and will respond to supply chain uncertainties arising from global geopolitical risks.
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