(image: Korea Bizwire)
SEOUL, Nov. 8 (Korea Bizwire) — South Korea budget air carriers are anticipated to post grim earnings for the third quarter of 2020, as the virus pandemic has continued to virtually suspend air travel, with the resurgence of infections around the globe set to further delay the recovery.
Last week, Korean Air Lines Co., South Korea’s biggest carrier, said its net losses widened in the third quarter to 385.93 billion won (US$343 million) from a year earlier amid the pandemic.
However, it managed to post an operating profit of 76 billion won as it began to carry cargo via passenger jets.
While bigger carriers managed to make ends meet via their cargo businesses, industry watchers say low-cost carriers will continue to face losses, as they lack larger-sized fleets capable of delivering more freight.
Jeju Air Co., South Korea’s biggest low-cost carrier (LCC) which posted an operating loss in the second quarter, is widely expected to deliver a gloomy earnings report for the July-September period.
Its operating losses are expected to reach 67.5 billion won, staying in the red from an operating loss of 85.4 billion won in the April-June period, according to local analysts.
T’way Air Co. is also projected to post an operating loss of 35.2 billion won in the third quarter, slightly narrowing from an operating loss of 48.5 billion won from the previous quarter, analysts said.
On the other hand, Eastar Jet Co., which has suspended all flights since March, has been on the verge of bankruptcy after Jeju Air scrapped a takeover deal in late July due to the COVID-19 pandemic’s growing impact on the airline industry.
“Due to the falling demand for passenger travel amid the COVID-19 pandemic, only Korean Air has managed to make profits through its cargo business,” an industry insider said. “Other LCCs will continue to languish in losses for the time being.”
(Yonhap)
