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Korean Air is benefiting from strong passenger demand despite higher costs, and the carrier projects that its passenger business will continue to improve in the second quarter (Q2).
The airline reported a first-quarter (Q1) net profit of KRW193.2 billion ($133 million), which was down from a profit of KRW 345.2 billion in the same period a year earlier.
Revenue rose by 3.5% year-on-year, with passenger revenue up 4% and cargo increasing by 5.8%. However, operating costs rose by 6.5%, with fuel costs down 6.3% and other costs rising by 13.2%.
The increase in other costs was driven by maintenance, the introduction of new aircraft, currency fluctuations and labor expenses.
Passenger traffic increased by more than capacity, resulting in a load factor gain of 1.6 percentage points to 85.2%. Demand was particularly strong for the Lunar New Year and March holiday periods.
The Q2 performance is expected to be boosted by robust demand in the May holiday period and the start of the peak travel season, the carrier said. Bookings are particularly good for outbound routes from South Korea to Southeast Asia, China and Japan.
Korean Air said it will look to expand capacity in high-demand markets with additional scheduled and charter flights.
The carrier saw healthy cargo demand in Q1, but it warned of market volatility due to reciprocal tariffs and trade disputes. Korean Air will respond to cargo market uncertainty through “close monitoring and timely response to market changes,” the airline said.
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