Korean Air, Asiana fly high, LCCs continue to struggle

Korean Air and Asiana Airlines performed better than expected in Q1 of the year on the back of their robust cargo transport businesses, but Jeju Air and other 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 2.8t won in sales ($2.19b) and 788.4b won in operating profit during the January to March period. This is an increase of 60 and 533%, respectively, compared to the same period last year. The net profit for the year went into the black by recording 543.9b won. In Q1 this year, cargo route sales recorded 2.14t won. The company focused on maximizing sales by increasing cargo planes. In Q1 of this year, passenger route sales increased 128% from a year earlier to 359.8b won due to the easing of entry restrictions in foreign countries. Asiana Airlines recorded record-high earnings in Q1 with rising demand for its cargo business. Sales increased by 46.4% to 1.14t won. Operating profit went into the black with 176.9b won and a net profit of 36.4b won. In Q1, the cargo business recorded 884.3b won in sales, up 45% from the same period last year. From Q2, 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.<br/>