Korean Air, one of the leading airlines in South Korea, has reported a significant drop in its cargo business revenue in the first quarter of 2023.
The airline’s cargo business revenue fell by 51% year-on-year to KRW 1.485 trillion, mainly due to the global economic slowdown and the decrease in shipment rates following the increase in passenger aircraft belly cargo capacity.
The COVID-19 pandemic has had a significant impact on the aviation industry, with many airlines struggling to stay afloat.
The decrease in passenger traffic has also affected the air cargo market, with the reduced demand for air travel leading to a drop in cargo shipments.
As passenger aircraft belly cargo capacity increased, this has further intensified the competition in the air cargo market.
Korean Air expects weaker air cargo demand in the second quarter of 2023 due to the global economic slowdown and uncertainties in the air cargo market.
However, the airline remains optimistic about its future prospects and plans to closely monitor the market to secure new freight demand and expand its revenue scope.
To achieve this, Korean Air is looking to flexibly utilize passenger aircraft belly cargo capacity on resuming routes to expand sales opportunities.
The airline is also exploring new avenues to boost its cargo business, such as partnering with e-commerce companies and expanding its global network.
Korean Air’s cargo business has traditionally been a significant revenue source for the airline, accounting for around 30% of its total revenue.
The airline is therefore keen to invest in its cargo business to ensure its long-term sustainability.