Cargo hands Korean Air another profitable quarter

Korean Air is “getting ready to return to a more normal life,” as it tentatively adds flights as travel restrictions and quarantine requirements fall. But the carrier has the luxury to be tentative and gradual. It, unlike the vast majority of airlines around the world, has reported profits for several quarters since the early days of the pandemic. The reason, of course, is cargo. Korean Air reported record third-quarter cargo revenues, beating its previous record by more than 100 billion won ($84 million). Korean Air’s reported 1.65t won in cargo revenues for the quarter ($1.4b), up 62 percent from the second quarter. Cargo, in fact, accounted for the lion’s share of Korean Air’s $1.9b Q3 revenue. The trend is expected to continue. Korean Air cited maritime shipping’s capacity constraints, port congestion around the world, and worker shortages at both ports and shipping lines as reasons for the modal shift to air cargo. The carrier also is anticipating a busy holiday peak season for cargo and is building out capacity at its cargo hubs and developing new airports as logistics centers, it said in its Q3 earnings report Friday. Half of the company’s cargo revenue comes from the Americas, another 17% from Europe, and the remainder from the Asia-Pacific region, the Korean Air said. Korean Air operates a fleet of 23 dedicated freighters (four Boeing 747Fs, seven 747-8Fs, and 12 777Fs) and at the end of Q3 had converted 10 Boeing 777s and six Airbus A330s into “preighters.” “Strong demand in cargo is not really satisfactory for us,” Korean Air Chairman and CEO Walter Cho said at the end of September. “I would really like passenger demand to come back up because that is the bulk of the business for us, and for the health of the industry.”<br/>