Korean Air reported a 31% increase in second quarter profit, driven by record revenue at its cargo business, which continues to support the airline amid a lack of passenger flights.
The Korean flag carrier said revenue in the second quarter of 2021 rose 16% from one year ago to KRW1.95 trillion ($1.7 billion) and operating profit rose to KRW196.9 billion.
Its cargo division achieved revenue of KRW1.51 billion, which Korean said was the highest in its history, thanks to companies restocking in anticipation of economic recovery and a shortage of capacity in the shipping industry.
The cargo division’s previous record revenue was in the fourth quarter of 2020, when it reported revenue of KRW1.36 trillion.
Korean Air said there were various uncertainties regarding the air cargo market in the second half of the year, citing vaccination rates and COVID-19 variants.
“However, cargo demand for IT and e-commerce will stay strong due to the recovering economy and boost in company restocking needs,” the airline commented. “Korean Air will continue to maximize its profit by utilizing its freighters and cargo-only passenger aircraft throughout its strong global network.”
The International Air Transport Association (IATA) said air cargo demand rose 8% in the first half of 2021, its strongest first half performance since 2017, commenting that it was acting as a revenue lifeline for many carriers.
Meanwhile, with passenger demand low, Korean Air said it was focussing on international charter flights and domestic routes to and from Jeju.
It expects passenger demand will remain sluggish in the second half of the year, noting that it is difficult to predict when it will recover.