1分6合

Korean Air cargo plane B747-8F / Courtesy of Korean Air

By Kim Hyun-bin

The polarization between full-service carriers and low-cost carriers has worsened during the ongoing pandemic. Korean Air and Asiana Airlines have reached record-breaking performances in the cargo sector, offsetting the decline in passenger sales, but low-cost carriers, which operate mainly on passenger business, are suffering from financial difficulties.

Korean Air posted the highest operating profit in its history last year, driven by a surge in air freight demand due to the shipping logistics crisis. The company recorded 1.46 trillion won in operating profit, an increase of a whopping 515 percent compared to the previous year, while its sales grew 18 percent to 8.75 trillion won. Cargo sales accounted for 6.69 trillion won of the total sales, up 57.5 percent from the previous year.

Asiana Airlines also succeeded in getting into the black thanks to its brisk cargo business. It recorded 4.11 trillion won in sales and 456.5 billion won in operating profit last year, seeing the operating profit push the company into the black for the first time in four years.

Local low-cost carriers, however, have been struggling to stay afloat, with large deficits accumulating each year.

Jeju Air posted a loss of 314.5 billion won last year following a 331.3-billion-won loss in 2020. Jin Air also recorded a 185.3-billion-won loss last year, following an operating profit of 184.7 billion won in 2020. T'way Air saw an operating loss of 148.3 billion won.

Low-cost carriers are trying to expand their cargo business. Jeju Air, for instance, aims to expand its air cargo transportation business by introducing a cargo plane into its fleet during the first half of the year, while Air Premia started shipping its first international cargo in December of last year. T'way Air also plans to introduce mid-to-large aircraft for cargo transportation.

However, analysts say it is unclear whether the cargo business of the low-cost carriers could indeed thrive, as cargo requires a strong sales network based on long-term trust, unlike passenger transportation.

"As the cargo business is hard to build in a short time, it will be difficult to improve profitability here in the near future," an airline industry official said.