A Korean Air Boeing 777-300ER aircraft [Korean Air]
A Korean Air Boeing 777-300ER aircraft [Korean Air]

Korean Air posted its highest-ever second-quarter sales this year. Both its passenger and cargo businesses grew, but surging fuel costs weighed on profitability, pushing operating profit down more than 30% from a year earlier.

Korean Air disclosed Monday that its preliminary second-quarter sales on a separate financial statement basis came to 5.02 trillion won ($3.33 billion), up 1.03 trillion won, or 26%, from 3.99 trillion won in the same period last year.

Operating profit, however, fell 34% to 261.8 billion won from 398.9 billion won a year earlier, as higher oil prices drove up fuel costs and squeezed margins.

The airline swung to a net loss for the period of 97.3 billion won in the quarter, compared with a net profit of 395.9 billion won in the second quarter of last year.

On a cumulative first-half basis, both sales and operating profit improved. Sales for the first six months of this year reached 9.54 trillion won, up 20% from 7.94 trillion won in the same period last year. First-half operating profit rose 4% to 778.7 billion won from 749.9 billion won a year earlier. However, net profit for the period for the first half fell 75% to 145.4 billion won from 589.1 billion won.

By business segment, both passenger and cargo revenue increased. Second-quarter passenger revenue came to 2.85 trillion won, up 451.4 billion won from a year earlier. Higher oil prices dampened outbound travel demand from South Korea to some extent, but a rise in transit passengers through the Middle East and growing inbound tourism helped expand capacity on key routes and drove the revenue gain.

Cargo revenue reached 1.54 trillion won, up 486.5 billion won from the same period last year. Growth in semiconductor and electronic component shipments tied to expanding global AI investment, along with strong K-beauty exports, underpinned air cargo demand. Korean Air attributed the results to actively securing high-value cargo and flexibly managing routes through the use of charter flights.

Across the aviation industry, expectations are building for a passenger demand recovery ahead of the summer peak season. Low-cost carriers are competing to add flights, particularly on Japan and Southeast Asia routes, while full-service carriers are also stepping up efforts to capture long-haul and transit demand.

Korean Air expects passenger demand to rebound in the third quarter, citing lower fuel surcharges as a factor that could lift travel sentiment alongside the summer peak-season effect. The airline projected that if outbound demand from South Korea recovers while inbound demand continues to flow in, both directions could strengthen simultaneously.

In cargo, the airline plans to continue attracting demand from AI-related industries to secure a stable revenue base. It intends to adjust supply nimbly in response to changes in the external environment and to improve sales and profitability by focusing on high-yield cargo.


kwater@heraldcorp.com