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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL, November 2, 2025 —
South Korea’s airline industry is facing growing concerns after reporting a major earnings shock in the third quarter, traditionally the sector’s peak season. Despite strong summer and autumn travel demand, carriers struggled with intensifying global competition, high exchange rates, and rising operating costs, resulting in weaker-than-expected financial results.
Korean Air, the first to report, posted ₩4.0085 trillion in consolidated revenue and ₩376.3 billion in operating profit for the third quarter, down 6% and 39% year-on-year, respectively. Net profit plunged 67% to ₩91.8 billion.
Analysts attributed the decline to increased global airline capacity, fierce fare competition, and exchange-rate volatility. Although the third quarter is typically the busiest travel period, stricter U.S. entry regulations and the Chuseok holiday shifting to October contributed to weaker passenger volumes.
Passenger revenue fell 7.5% year-on-year to ₩2.4211 trillion, while cargo revenue dropped 4.7% to ₩1.0667 trillion, impacted by U.S. tariff risks and slowing global trade. Korean Air cited rising fixed costs — including depreciation, maintenance, and airport fees — as a key factor eroding profitability.
Other Korean carriers are expected to report similarly poor results. Asiana Airlines and low-cost carriers (Jeju Air, Jin Air, Air Busan) are struggling with high fuel and lease costs, weak won exchange rates, and intense price competition. Brokerages have lowered their target prices for most listed airlines, warning of continued earnings pressure into the fourth quarter.
Among low-cost carriers, Jeju Air faces the steepest decline, with operating profit forecast to plunge 95.4% year-on-year to ₩2.2 billion, followed by Air Busan (-60%) and Jin Air (-48%), according to financial data provider FnGuide.
While the near-term outlook remains challenging, analysts see limited upside from holiday travel demand during the extended October Chuseok holidays, and longer-term recovery potential from China’s continued visa-free entry for group tourists, which could help improve flight operations and load factors heading into 2026.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
