[Click eStock] 7.99 Million International Passengers in August... Rising Expectations for Airline Earnings Recovery

98% Recovery Compared to 2019... Strong Performance on China and Americas Routes
Seasonal Boost on Southeast Asia Routes, Temporary Decline on Japan Routes
Cargo Performance Also on the Rise, Optimism for 4th Quarter Consumer Peak Season

In August, the international passenger traffic at airports nationwide showed a recovery rate of 98% compared to the peak period in 2019. Notably, the growth in routes to the Americas, which recorded the highest-ever performance, and Southeast Asia stood out. Ahead of the peak season in the fourth quarter, airlines' expectations for performance recovery are increasing.

According to SangSangin Securities on the 9th, the international passenger traffic at airports nationwide in August reached 7.99 million, recording a recovery rate of 98% compared to the same month in 2019. The passenger growth rates by region were Japan 16%, China 57%, Southeast Asia 8%, Americas 20%, and Europe 2%. The Japan route saw a short-term decline in travel demand due to the strong yen and concerns over earthquakes and typhoons, resulting in a monthly decrease of -2%.

Researcher Lee Seoyeon of SangSangin Securities stated, "The Southeast Asia route recorded a monthly growth of +4% due to the peak vacation season effect in the third quarter, and the China route is nearing normalization by recovering up to 95% of the 2019 monthly average performance. The Americas route recorded the highest-ever passenger traffic due to increased business and transit demand." The Europe route showed growth compared to the previous year but still has a low recovery rate compared to 2019.

Passenger growth rates by airline were 18% each for Korean Air and Asiana Airlines, 7% for Jeju Air, 20% for Jin Air, and 11% for T'way Air.

The cargo transport performance at Incheon International Airport in August was 239,000 tons, growing +5% compared to the previous year. The Shanghai-origin air cargo freight index averaged 4647 points in August, down -1% monthly but up +30% year-on-year. The easing of the sharp rise in sea freight rates reduced the reflective benefit effect, and entering the off-season for consumption, the volume of e-commerce shipments from China also slowed, leading to a decline in air cargo freight rates. However, both volume and freight rates remain strong compared to the previous year, so a recovery is expected in the fourth quarter, the peak consumption season.

Researcher Lee said, "The weakness in the Japan route is regrettable, but the rapid recovery of China passenger performance and the continuous growth in demand on the Americas route contribute to maintaining strong overall passenger demand. In autumn, additional travel demand is expected due to the extended Chuseok holiday period and increased temporary holidays compared to the average year." Recently, with cost variables such as exchange rates and oil prices turning favorable, airlines are expected to succeed in cost control, increasing expectations for performance recovery.