Operating profit came to 413.1 billion won ($280 million) in the October–December period, down 5.1 percent from a year earlier but comfortably above market expectations of around 360 billion won. Revenue rose 13 percent to 4.55 trillion won, while the operating margin slipped to 9.1 percent from 10.8 percent a year earlier.
The earnings beat was driven by resilient passenger demand and improving yields. Passenger yield — average revenue per kilometer — rose 6.3 percent on year to 129 won, helping offset higher operating costs stemming from the weaker currency. The popularity of Korean culture and a favorable exchange rate continued to attract inbound travelers, supporting long-haul profitability.
Demand from overseas visitors, particularly Chinese tourists, also lifted results. Chinese arrivals to Korea in October and November rose 24.7 percent year-on-year, as Beijing’s continued restrictions on group tours to Japan redirected more outbound travel toward Korea. Total foreign arrivals during the period increased 12.7 percent, aided by the weak won and the global appeal of Korean content.
Inbound passenger traffic from North America rose 12.4 percent, allowing Korean Air to keep its trans-Pacific routes profitable despite a decline in transfer passengers from China amid ongoing U.S.–China tensions.
Cargo operations showed a similar pattern. While cargo ton kilometers edged lower, a higher share of high-value IT and equipment freight, together with firmer rates, supported revenue. Cargo yield climbed 4.5 percent to 561 won per kilometer, offsetting much of the impact from currency moves and oil prices. Yield remains a key indicator of an airline’s earning power.
Looking ahead, Korean Air said it will prioritize profitability by flexibly managing seat supply and sales channels. The carrier plans to increase overseas point-of-sale exposure to cushion against potential softness in outbound Korean demand, while diversifying its cargo portfolio and adjusting freighter capacity in line with market conditions.
Management also emphasized fleet renewal and route optimization as levers to improve efficiency. Relatively low oil prices and a weaker won are expected to remain broadly supportive of its cost structure.
“We expect a gradual re-rating of Korean Air’s share price as expectations for integration are increasingly reflected,” said Choi Ji-yun, an analyst at Yuanta Securities.
Brokerages largely maintained positive views following the fourth-quarter beat. KB Securities raised its target price by 10.7 percent to 31,000 won, while LS Securities lifted its target to 28,000 won, up 3.7 percent from its previous estimate.
NH Investment & Securities, however, struck a more cautious tone, citing weaker earnings at subsidiaries and rising costs. The brokerage cut its target price to 29,000 won from 30,000 won, warning that consolidated results could lag expectations.
“Peak-season demand has lifted international passenger and cargo fares, but rising depreciation from new aircraft and higher labor costs are keeping operating expenses elevated,” said Jeong Yeon-seung, an analyst at NH Investment & Securities. He added that weak profitability at Asiana’s long-haul routes and subsidiaries remains an overhang, and that a sustained share-price rebound is likely to depend on tangible synergies once full-scale joint operations begin this winter.
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