International air travel business has been hit hard by the COVID-19 pandemic. Still, a handful of airlines have maintained healthy economic conditions even during the worldwide crisis. For instance, Korean Air, which has revealed its revenue report for 2020 and it does not seem bad whatsoever.
Although the company ended up with a net loss, the overall deficit was lower than in 2019. Meanwhile, the operating profit was only 17% less than the previous year.
At the end of 2020, Korean airline’s operating profit scaled up to USD $219 million derived from sales of almost USD $7 billion. That is not far from 2019 figures when the company made a profit of almost USD $263.2 million.
In 2019, the airline saw a net loss of USD $522.7 million. In 2020, the net loss was significantly reduced to only USD $209.7 million.
Korean Air managed to reduce the losses by lowering operational costs by 40% and adding to liquidity by issuing new shares. They also sold their in-flight catering and duty-free business for a total of USD $878 million.
The net income, however, remained negative. The company claims that not solely because of the Coronavirus crisis but also because of its net interest expense.
Most passenger flights have been suspended since April 2020. Therefore, the airline turned its focus on cargo transportation. They fully employed their fleet of 23 freighter aircraft and increased the operation rate by around 25% compared to the previous year.
They also utilized passenger planes, which would otherwise remain unused, to support cargo transport.
In 2020, the company operated more than 4,500 cargo flights using non-freighter aircraft.
Most of the airline’s income came from a high cargo demand for Coronavirus-related medical supplies, such as face masks or test kits.
Keehong Woo, the president of Korean Air, praised the airline’s employees for being determined to overcome the crisis with hard work and numerous sacrifices such as taking voluntary rotational leave.
Korean Air is set to carry on its self-rescue practice to ensure financial stability throughout 2021. Priority will be given to the cargo market, while the passenger seat capacity will remain limited until the end of this year.
According to ICAO (International Civil Aviation Organization), international air travel suffered a 60% drop in 2020, taking the industry back to the early 2000s levels. Only 1.8 billion passengers were transported last year, compared to 4.5 billion in 2019.
Korean Air, along with Asiana Airlines, Ethiopian Airlines, and VietJet, is one of the very few airlines which have managed to benefit from the COVID-19 crisis.