Korean Air has recorded record yearly and quarterly profits, owing to its cargo operations, defying the COVID-19 doom.
Korean Air claimed its cargo division experienced a record fourth quarter, with revenues of KRW 2.1807 trillion, and that it was able to respond effectively to global supply chain delays caused by the spread of the COVID-19 Omicron version.
Due to a dearth of available cargo capacity in the market and excessive demand, cargo transportation prices have increased, boosting profitability.
On January 25, 2022, the International Air Transport Association (IATA) reported that freight rates were about 150 percent higher in December 2021 than in 2019.
According to IATA, global aviation freight demand increased by 7% in 2021 compared to pre-COVID-19 levels.
“Peak demand during the year-end holiday season and constraints in passenger jet belly space due to reduced operations have led to a noticeable increase in fares,” Korean Air explained in its statement on January 27, 2022.
The South Korean flag carrier warned that Omicron could prolong the return to normalcy of global supply lines.
“The cargo business will keep these uncertainties in mind as it strengthens its operational capabilities to render stable and dependable air cargo capacity, and actively responds to market changes by operating charter and cargo-only passenger flights,” it said.
Overall sales for 2021 was KRW 8.7534 trillion ($7.4 billion), up 18% year on year, while operating profit increased six-fold to KRW 1.4644 trillion ($1.2 billion).
Korean Air’s previous yearly profit record was KRW 1.1589 trillion, set in 2010.
Korean Air reported an increase in passenger traffic as a result of the extension of quarantine-free travel to places such as Guam, Singapore, and Hawaii from Korea.
“Korean Air expects the speed of passenger demand recovery to be determined by the COVID-19 variant situation and border regulations.
The airline intends to continue operating routes in a flexible manner in order to respond to market developments,” it stated.