Korean Air and Asiana Continue Strong Cargo Transport Performance This Year

On the 26th, the initial batch of Pfizer vaccines secured through the international vaccine supply organization 'COVAX facility' is being unloaded from a Korean Air cargo plane at the Incheon International Airport cargo terminal. / Yeongjongdo - Photo by Airport Photographers Group

[Asia Economy Reporter Dongwoo Lee] Korean Air and Asiana Airlines are expected to continue profitable management this year, riding on last year's record-high cargo performance.

According to financial information firm FnGuide on the 2nd, Korean Air is projected to record an operating profit of 1.1832 trillion KRW and sales of 8.7796 trillion KRW last year. This is the first time in five years since 2016 (1.1208 trillion KRW) that Korean Air's operating profit has exceeded 1 trillion KRW.

Asiana Airlines also continued strong performance by recording an operating profit of 243.9 billion KRW on a separate basis for the first to third quarters of last year.

The industry analyzed that the cargo sales of the two airlines significantly increased due to rising shipping freight rates boosting air cargo demand. Air cargo freight rates rose due to a shortage of belly cargo capacity caused by reduced passenger flights. The TAC index, an air cargo freight rate index, recorded an all-time high of 11.54 USD per kilogram on the Hong Kong-North America route in November last year.

Air cargo demand is expected to continue increasing in the first half of this year as well.

Yang Ji-hwan, a researcher at Daishin Securities, said, "According to data from the International Air Transport Association (IATA), compared to the pre-COVID-19 period in 2019, air cargo supply has decreased by about 8% while demand has increased by about 10%, resulting in a supply shortage of approximately 18%. With the Delta variant followed by Omicron and the uncertainty of what variants may appear in the future, it is difficult to predict when international flights will return to normal."

He added, "It is judged that international passenger flights will not normalize in 2022 either, and accordingly, the air cargo market is likely to continue its boom."