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Korean Air's Q3 Profit Plunge: 67% Drop Amid Rising Operating Costs

Korean Air experienced a significant 67% drop in third-quarter net profit. The airline's sales decreased by 6% to 4 trillion won during the July-September period. Higher maintenance costs and operating expenses outweighed the benefits of reduced fuel prices. The company anticipates improved performance in the fourth quarter thanks to holiday travel and peak season demand.

Key Points: Korean Air Q3 Net Profit Falls 67 Percent Over Costs

  • Net profit plummeted 67% to 91.8 billion won amid higher operating expenses
  • Sales dropped 6% to 4 trillion won with passenger revenue down 196 billion won
  • Operating profit fell 39% despite lower fuel costs due to maintenance increases
  • Cargo business declined amid global market slowdown and US tariff risks
2 min read

Korean Air's Q3 net profit drops 67 pc over increased costs

Korean Air reports 67% net profit decline in Q3 as increased maintenance and operating expenses offset lower fuel costs, despite sales dropping 6%.

"Revenue fell due to increased global supply and intensifying price competition - Korean Air"

Seoul, Oct 21

Korean Air Co. said on Tuesday its third-quarter net income declined over 60 per cent from a year earlier, as increased operating costs weighed down on its earnings.

The national flag carrier's net profit reached 91.8 billion won ($64.3 million) during the July-September period, down 67 per cent from a year ago, the airline said in its statement.

Sales dropped 6 per cent on-year to 4 trillion won, compared with 4.24 trillion won from the same period last year. Operating profit came to 376.3 billion won, down 39 per cent on-year.

The company said overall operating expenses increased due to higher maintenance costs despite a drop in fuel prices.

The passenger business sales totaled 2.42 trillion won, down 196.2 billion won from a year earlier. The decline was mainly due to the shift in the Chuseok holiday from September in 2024 to October this year, as well as temporary variables including stricter US entry regulations.

Sales of the cargo business reached 1.07 trillion won, down 53.1 billion won from last year, amid a slight slowdown in the global air cargo market in light of US tariff risks.

“Revenue fell due to increased global supply and intensifying price competition. Fuel costs decreased, but overall operating expenses rose as depreciation, maintenance costs, and airport and passenger-related costs increased, reducing operating profit as well,” the airline said.

Looking ahead, Korean Air said it expects improved performance across its passenger network in the fourth quarter, supported by its performance during the long Chuseok holiday in October and the year-end peak travel season.

"We will improve profit through flexible capacity operations that reflect changes in market conditions, the maximum attraction of e-commerce demand, and the expansion of high value-added cargo,” according to the airline.

- IANS

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Reader Comments

R
Rohit P
Interesting to see how festival timing affects airline revenues. In India too, airline profits fluctuate based on Diwali and other festival dates. The Chuseok holiday shift had a big impact here.
M
Michael C
The US tariff risks and stricter entry regulations are creating challenges for international carriers. This could affect Indian airlines too if similar policies expand globally. Need to watch this space carefully.
A
Ananya R
I flew Korean Air last month and noticed they've cut back on some amenities. Now I understand why - cost pressures. Hope they don't compromise on safety and service quality though. 🙏
S
Sarah B
The cargo business decline is concerning given how important air freight has become post-pandemic. With e-commerce booming, surprised they couldn't capitalize more on that segment.
V
Vikram M
This is why Indian airlines need to be careful with expansion. Operating costs can quickly spiral out of control. Korean Air's experience is a lesson for our aviation industry too.

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