"Airline Stocks Entering Off-Season, Limited Short-Term Potential for Price Rebound"

LS Securities analyzed on the 8th that the short-term stock price rebound potential for airline stocks is limited.

Last month, Incheon International Airport's international passenger transport performance reached 5.98 million. This is the highest ever for March. Jaehyuk Lee, a researcher at LS Securities, explained, "Demand for Japan routes remains steady, and the North American routes have continued their strong performance trend," adding, "The average load factor for China routes also improved by 13% year-on-year to 128 passengers per flight."

LS Securities evaluated that the operating environment for airlines in the first quarter was not favorable. He said, "The operating environment for domestic airlines in the first quarter is expected to have been somewhat disappointing compared to early-year expectations," citing "the prolonged high exchange rates and increased airport costs leading to higher expenses, the Fair Trade Commission's corrective measures related to the merger of Korean Air and Asiana Airlines, and the dampening of consumer sentiment for low-cost carriers (LCCs) due to successive airline accidents" as the background.

In particular, since the second quarter has entered the off-season, it is expected that stock price rebounds will be difficult for a while. He noted, "Following the recent announcement of reciprocal tariff policies by the Trump U.S. administration, the slowdown in air cargo business and the possibility of consumer economy contraction have become prominent, leading to a clear decline in stock prices across the domestic and international airline sectors," adding, "At this point, entering the traditional off-season of the second quarter, the short-term stock price rebound potential for the airline sector is expected to be somewhat limited."

However, he expressed expectations that the atmosphere could reverse in the second half of the year. He emphasized, "Expectations remain valid for the downward stabilization trend of jet fuel prices after the second half, recovery of consumer and travel sentiment due to easing political uncertainties, and the full-scale synergy effect of the Korean Air-Asiana Airlines merger."