Korean Air is expecting air cargo to remain under pressure at least until the first quarter of the year amid persisting challenges to supply chains and as the industry continues to recover from the disruptions brought by Covid-19.
The South Korean flag carrier made the forecast as it released its non-consolidated results for Q4 2022, which marked a double-digit decline in its cargo revenue.
This is in contrast with the sustained recovery seen for Korean Air's passenger business which last year recorded a revenue surge of 339% year-on-year to KRW 1.6648 trillion (US$1.33 billion), fueled by growing air travel demand.
Korean Air noted that passenger revenue exceeded cargo revenue, a sign of a "full-fledged passenger demand recovery phase."
Weak cargo expected in Q1 2023
The airline reported that for the period, cargo revenue fell 29% year-on-year to KRW 1.5483 trillion (US$1.24 million).
"Cargo business was affected by diminished demand due to global economic slowdown, decrease in shipment rates following the increase in passenger plane belly and bulk cargo capacity," Korean Air said.
Korean Air said moving forward, it forecasts cargo to remain weak, at least in the first quarter of 2023, as challenges remain.
The airline noted, however, that it will be prepared to face business environment changes and also strengthen its foundation for mid-to-long-term growth for the acquisition of Asiana Airlines to tackle uncertainties in post-pandemic 2023.
"With the global economic slowdown, the airline forecasts weaker air cargo demand. The airline seeks to secure demand by strengthening cooperation with large consignors and global forwarders and respond to market volatility by enhancing service quality, including additional certification on special cargo," Korean Air said.
