Has Korean Air's Q3 Net Profit Declined by 67% Due to Rising Costs?
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Synopsis
Korean Air's third-quarter financial results reveal a shocking 67% drop in net profit, largely due to escalating operational costs. This decline raises questions about the airline's future strategy amidst fluctuating market conditions.
Key Takeaways
- Korean Air's net profit fell by 67% in Q3.
- Sales decreased by 6% year-on-year.
- Operating expenses rose due to higher maintenance costs.
- Passenger sales dropped primarily due to timing of the Chuseok holiday.
- Future performance looks promising with upcoming peak travel seasons.
Seoul, Oct 21 (NationPress) Korean Air Co. announced on Tuesday that its net income for the third quarter has plummeted by over 60 percent compared to the previous year, as rising operational costs impacted its financial results. The national airline's net profit was reported at 91.8 billion won ($64.3 million) for the July-September timeframe, marking a 67 percent decline from last year's figures.
The airline's sales fell 6 percent year-on-year to reach 4 trillion won, down from 4.24 trillion won in the same quarter last year. Operating profit also saw a significant drop, amounting to 376.3 billion won, which is a 39 percent decrease compared to the previous year.
Korean Air indicated that overall operating expenses rose due to higher maintenance costs, despite a decrease in fuel prices.
In the passenger segment, sales were recorded at 2.42 trillion won, down by 196.2 billion won compared to last year. This decline is attributed to the postponement of the Chuseok holiday from September in 2024 to October this year, along with temporary factors such as stricter entry regulations in the United States.
Meanwhile, the cargo division reported sales of 1.07 trillion won, which is 53.1 billion won lower than the previous year, reflecting a modest slowdown in the global air cargo market amid potential US tariff risks.
“Revenue has declined due to a surge in global supply and growing price competition. Although fuel costs have fallen, overall operational expenses increased due to depreciation, maintenance, and costs associated with airports and passengers, which in turn diminished operating profits,” the airline explained.
Looking ahead, Korean Air anticipates an uptick in performance across its passenger network for the fourth quarter, buoyed by strong results during the extended Chuseok holiday in October and the approaching year-end travel peak.
“We aim to enhance profitability through adaptive capacity management that aligns with market trends, maximize e-commerce demand, and expand our high-value cargo offerings,” the airline concluded.
Point of View
I recognize the profound implications of Korean Air's significant profit decline. This situation demands a careful examination of the airline's operational strategies amid rising costs. Our commitment is to provide comprehensive coverage that informs readers about the evolving landscape of the aviation industry.
NationPress
21/10/2025
Frequently Asked Questions
What caused the decline in Korean Air's net profit?
The decline was primarily due to increased operational costs impacting earnings, despite a decrease in fuel prices.
How much did Korean Air's sales drop in the third quarter?
Sales dropped by 6 percent year-on-year to 4 trillion won.
What is the outlook for Korean Air in the fourth quarter?
Korean Air expects improved performance in its passenger network, fueled by the Chuseok holiday and the year-end travel season.
