Credit: Korean Air.
The pandemic was supposed to be bad news for airlines, but not for Korean Air 대한항공. For 3Q 2021, South Korea’s flagship air carrier turned a profit of KRW 171b (USD 144.6m), after defending the business relatively well during the harsh season for airlines.
The secret was a quick switch to freight. Even as passenger travel was slow to recover, the amount and the cost of carrying freight increased dramatically. The amount of air freight in 3Q 2021 increased by 19.2% compared to 3Q 2020; the cost of air freight more than doubled compared to pre-pandemic.
On the other hand, the low-cost carriers that could not pivot to freight continued to suffer. Small airlines like Air Busan 에어부산, Jeju Air 제주항공 and Jin Air 진에어 will all require additional capital injection to stay solvent while hoping that increased vaccination will lead to more air travel.