Year-end reopening lifts South Korean LCC earnings

South Korean low-cost operator Jin Air posted its first quarterly operating profit in more than three years, helped by a rebound in travel demand that has also helped boost the earnings of compatriots Jeju Air and T’way Air. For the three months ended 31 December 2022, Jin Air reported an operating profit of W11.6b ($8.9m), reversing the W31.6b loss posted in the year-ago period. The sister carrier of Korean Air saw revenue more than double year on year, to W225b, with more than half of it coming from international operations. Revenue from flights to Japan made up 27% of the quarterly revenue, a significant jump against the previous quarter when Japan’s borders still remained closed to most international travellers. Costs rose 92% year on year to W213b, in line with an increase in flying activity. T’way, meanwhile, posted its first quarterly net profit since the pandemic, though it remained in the red at the operating level. The carrier reported an operating loss of W36b, significantly narrowing the W295b loss in the year-ago period. It rebounded to a net profit of W232b, compared to the W296b loss in 2021. Quarterly revenue tripled year on year to W2.1t, with takings from Southeast Asian and Japanese flights increasing the most against the year-ago period. T’way notes that the number of international flights in the fourth-quarter has recovered to about 43% of the same period in pre-pandemic 2019, while passenger numbers are more than 53% that of 2019 levels. For the full-year, the three carriers were still loss-making, but were optimistic in their recovery outlook, especially with Mainland China reopening its borders at the start of 2023. <br/>