] South Korea’s major air carriers Korean Air Lines
, Asiana Airlines
and Jeju Air
are expected to beat earnings estimates in the third quarter thanks to rising air traffic and low oil prices, a local brokerage said on Oct. 24.
According to Samsung Securities, the combined revenue and operating profit of the three air carriers are likely to increase 7.4 percent and 59 percent to log 5 trillion won (US$4.47 billion) and 597.1 billion won, respectively, in the July-September period.
An uptick in international route yield -- average revenue per passenger -- has helped the firms to improve their earnings, said Kim Young-ho, an analyst at Samsung Securities.
“A growing demand for travel and oil prices that have decreased 12 percent from a year ago also had a positive impact,” he said.
Jeju Air, the country’s largest low-cost carrier, is expected to log the most solid gains against other two full-service carriers, by reporting 219.6 billion won in revenue, up 31.8 percent on-year. Its operating profit is forecast to surge 128.2 percent to 38.3 billion won.
“Jeju Air’s robust growth will be continued as it adds new aircrafts and expands routes,” Kim said.
He added that Value Alliance, the Asia-Pacific region’s first alliance comprising eight low-fare carriers including Jeju Air, will also help the firm to boost its revenue and usage of its networks when the it launches next year.
Korean Air’s third quarter operating profit is likely to grow 46.5 percent to 424.1 billion won while its smaller rival Asiana Airlines may see 94.3 percent increase to report 134.8 billion won, the securities firm said.
By Park Han-na (email@example.com