Korean Air posts Q1 revenue record of $3 billion

Korean Air posted a whopping 4.51 trillion won ($2.98 billion) in revenue during the first three months of this year, the highest ever for the country's largest carrier for the first quarter period.

The company's January-March revenue marked a 14.1 percent jump compared to a year earlier, according to public disclosure on Monday.

Korean Air’s quarterly operating profit was tentatively tallied at 516.9 billion, up 47.3 percent on year, according to the flag carrier's public disclosure on Monday.

The airline’s passenger business revenue reached 2.61 trillion won, a 7.3 percent increase compared to the same period last year. The uptick was driven by high demand in flight services during the Lunar New Year holiday in February, along with a strong performance on European routes and key transit routes.

The airline’s freight sector also saw a rise in revenue — 1.09 trillion won, accompanied by a 3.5 percent on-year increase. The performance was led by the expansion of fixed-volume cargo contracts, increased demand for high-value shipments such as semiconductors and flexible operations on the back of strong freight rates on U.S. routes.

However, uncertainties stemming from the Iran war are likely to cast a shadow over the airline’s operations in the second quarter.

In response to higher oil prices and depreciation of the Korean won, Korean Air said it will “shift focus toward overseas and transit demand to offset a slowdown in domestic outbound travel” regarding passenger operations. The cargo division will aim to capitalize on high-growth sectors, including AI-related industries and K-beauty.

Starting this month, Korean Air has entered emergency management mode to strategically manage surging jet fuel prices amid the Iran war. The company will pursue corporate-wide measures to boost its cost-efficiency and bolster the foundation for mid- and long-term growth.

Jet fuel prices customarily account for 30 percent of an airline’s operational costs.

If the oil price increases by $1, the airline’s losses could climb by around $30.5 million, according to a business report from Korean Air. When accompanied by a depreciation of 10 won to the dollar, the fluctuation range can reach 55 billion won.

Industry observers forecast that the pressure on the airline’s profitability is likely to intensify as rising oil prices will be fully reflected in the second quarter. 

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY PARK YOUNG-WOO [[email protected]]