Korean Air survived the pandemic with no losses but faces new challenges

Around the world, the pandemic left the airline industry in the red. Korean Air’s flight path, however, has been very different as the only airline posting consistent profits, riding on the back of its robust cargo operations. Despite continued high oil prices and volatile exchange rates, Korean Air achieved a revenue of $2.5b and an operating profit of $569.2m in the second fiscal quarter that it announced this week. Even though Korean Air posted an impressive $1.2b operating profit in 2021, the passenger business is still in fragile recovery. While passenger revenue started bouncing back earlier this year, it still accounts for only 14% of total revenue. The slow recovery in passenger traffic is largely due to the fact that while Korea is relatively open compared to other North Asian countries it is not fully open like Southeast Asia. Even prior to the pandemic, Korean Air already had one of the largest cargo businesses among passenger airlines. Cargo used to be between 40-45% of the airline’s total revenue and that shot up to over 80% during the pandemic. “Having a large cargo operation and a lot of cargo experience enabled Korean Air to pivot more easily compared to other passenger airlines,” said Brendan Sobie of Sobie Aviation, a consulting firm for the aviation industry. Story has more.<br/>