In its first-quarter financial reports, Korean Air recorded revenue of KRW 2.8052 trillion ($2.3168 billion) and a “record quarterly operating profit” of KRW 788.4 billion ($651.1 million).
Its previous quarterly operating profit was KRW 704.4 billion ($559.3 million) in Q4 2021.
The Seoul-based carrier credits its increased earnings to the utilization of its grounded passenger jets on cargo flights as well as enhanced freighter operation rates.
Korean Air had a revenue of KRW 1.7498 trillion ($1.4452 billion) and an operating profit of KRW 124.5 billion ($102.8 million) in the same quarter of 2021.
However, due to global supply chain constraints, capacity gaps across European routes, and higher fuel prices, the airline said that the air freight market remains unpredictable.
“Korean Air is taking preemptive measures to maintain its air cargo capacity through close management of ground handling operations and flexible network operations,” the airline said in a statement published on its website.
Passenger business set to ‘quickly recover’ in 2022
Despite the introduction of the COVID-19 Omicron variant, Korean Air anticipates its passenger business to rebound swiftly in 2022 as more countries relax entrance restrictions and open their airspaces.
Korean Air’s passenger flight operations brought in KRW 359.8 billion ($285 million) in the first quarter of 2022.
“The recovery of passenger demand will vary by route and region, and the airline will closely monitor and flexibly respond to the market and changing quarantine policies of its network,” the airline said.
The required quarantine for fully vaccinated passengers was abolished on March 21, helping to stimulate travel demand.
“Recovery in global passenger demand is foreseen to gradually boost global air cargo capacity, but instability in regional air cargo markets is expected to persist due to major Chinese city lockdowns and the war in Ukraine,” the airline said.
In addition to its operating results, Korean Air noted that it had managed to “significantly improve its financial structure by reducing debt”.
The airline’s debt ratio (the amount of money it takes in to pay off its debt) fell from 814 percent at the end of 2019 to 255 percent in the first quarter of 2022. This is a 559 percent drop in debt, making it the airline’s lowest debt ratio since 2011.
Korean Air has approximately KRW 4 trillion ($ 3 billion) in cash and cashable assets, according to its statement, giving it the flexibility to respond to market risks.