The airline Korean Air was able to fly in an operating profit of 219 million US dollars last year despite the corona crisis. According to the company, sales were $ 6.806 billion.

However, the revenue was not generated in the passenger business, as this segment recorded a 74 percent decline in sales. The carrier was able to benefit from the increased demand for freight. The decision to temporarily use machines that are actually used for passengers for cargo orders has evidently proven to be the right one. According to Korean Air, the following aspect was decisive: "The increase in the air freight business is based on an increasing demand for COVID-19 diagnostic kits and auto parts, with demand also shifting from ocean freight to air freight". Revenues generated in the Freight segment rose by 66 percent.

“The operating result was driven by the airline's strong cargo business and efforts to reduce costs across the company. The reduced passenger capacity and falling oil prices have reduced fuel consumption and fuel costs. Associated costs such as deployment fees were also reduced due to the lower passenger traffic. Wage costs also fell slightly, as the employees took turns taking vacations. Accordingly, the total operating costs were reduced by 2020 percent in 2019 compared to 40. The airline posted a net loss of KRW 228,1 billion (US $ 209,7 million) due to net interest expense, but this was significantly less than last year's net loss of KRW 568,7 billion, ”said Korean Air.

Company boss thanks employees

“The Korean Air workforce is committed to overcoming the crisis together,” said Keehong Woo, President of Korean Air. “The positive result in 2020 was only possible thanks to the hard work and sacrifice of our employees. Almost 24 percent of global air cargo capacity was lost in the past year as airlines suspended most international flights due to COVID-19. However, Korean Air has increased cargo operations through the use of additional / charter carriers to meet the demand for medical equipment such as COVID-19 test kits and masks. We have also increased cargo capacity by converting passenger jets into cargo planes. It was just right to keep our cargo network strong and active ”.

In addition to its strong cargo business, Korean Air has expanded its capital and improved its financial structure through various measures such as the sale of non-core assets.

Last year, Korean Air successfully added KRW 1,1 trillion to its capital by issuing new shares and completed the sale of its Inflight Catering and Duty Free business for KRW 981,7 billion. The airline is currently finalizing the sale of KAL Limousine and Wangsan Leisure Development Co. Ltd. In addition, Korean Air is seeking more liquidity through the sale of its stake in Hanjin International Corp., which operates the Wilshire Grand Center in Los Angeles, and speaks with the city government of Seoul on the sale of the company's own property in the center of the capital of South Korea.

Korean Air expects the market to recover slowly

In addition, Korean Air is currently in the process of acquiring Asiana Airlines. The airline is thus stabilizing the Korean aviation industry affected by the pandemic and ensuring growth in the domestic aviation market. Korea is the XNUMXth largest economy in the world, which makes its economic stability important worldwide.

The COVID-related uncertainty continues to point to grim prospects for the aviation industry this year. The IATA predicts that passenger demand this year will stay at 2019 percent compared to before the 50 pandemic. In addition, the demand for air freight is expected to be similar to 2019.

Specifically, the airline will add KRW 3,3 trillion in capital by issuing new shares in March to secure liquidity, improve its financial structure, and at the same time resolve economic issues in the Asiana Airlines acquisition. Korean Air will conduct a PMI (Post Merger Integration) to integrate Asiana Airlines as planned. Employees' unpaid leave will continue this year.

In contrast to the positive development of the air freight market, only a slow recovery is expected for the passenger business. Accordingly, Korean Air plans to keep the current passenger seating capacity until the end of this year, until the market picks up again thanks to the COVID-19 vaccine.