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DALLAS — Korean Air (KE) is witnessing a strong trend in passenger demand bouncing back from the pandemic, especially in its North American market.
For its second quarter, the airline posted revenue of US$2.693 billion and an operating profit of US$356.5 million. In the background, a much-desired merger with Asiana (OZ) is still in the works as discussions with necessary regulatory bodies continue and the airline expects a positive outcome.
Airways' correspondent Siddharth Ganesh discusses with Mr. Jin Ho Lee, Korean Air's Senior Vice President and Head of Americas Regional Headquarters, the ongoing positive and impactful growth experienced in the South Korea-North American markets.
SG: How have passenger loads (LF) been on North America-bound flights post-pandemic? The growth seems very positive.
JHL: Passenger loads on our North American flights have been growing very fast post-pandemic. In 2022, passenger loads had already reached 73% (86% of 2019 levels) and in the first half of 2023, 88%, exceeding 2019 levels for the same period. In June this year, passenger loads reached 93%.
In answer to the previous question, capacity is an ideal issue you'd like to increase given the positive trend. With 11 destinations in the US currently being served, what destinations would you increase the frequency of in the order of sequence based on the demand?
Traditionally, we have the strongest travel demand on our Los Angeles and New York routes. But with the recent investments by Korean corporations in the central and eastern regions of the US, we are seeing a significant increase in business travel demand on the Atlanta route.
We have recently increased our flight frequencies on the Chicago, Dallas, and San Francisco routes, and capacity on our North American routes has recovered to 94% of pre-pandemic levels.
What are certain new destinations you have in the works?
We are also operating several charter flights to Anchorage this summer. While we currently don't have any confirmed plans for new destinations, we will continue to monitor the market and look for new network opportunities.
Trade remains vital between South Korea and the US, as world air freight numbers decline, what's it like for Korean Air, especially on North American routes?
Despite a downward trend in consumer spending due to the prolonged global geopolitical instability and continuous interest rate hikes, we can observe some positive trends such as the US Federal Reserves’ easing of some US interest rate hikes and the stabilization of international oil prices.
E-commerce demand showed tremendous growth during the pandemic and continues to grow steadily. In addition, demand for Samsung foldable phones from Vietnam and K-pop records from Korea among other items remains strong. Apple’s new iPhone model is also expected to be released later this year. This all adds up to increased business.
Cargo demand on the North American routes is steady, with seasonal fresh cargo such as cherries, grapes, and lobsters being shipped to Asia from North America. Korean Air is operating its cargo operations with flexibility and adjusting capacity according to demand.
As for fleet, Korean Air maintains a rather diverse one - would there be some streamlining soon, or does the decision to that stay on hold until the merger is through?
Korean Air has a diverse fleet, and we are efficiently utilizing our aircraft according to the market and demand. We are not yet at a stage to discuss specific fleet plans post-merger.
Featured Image: Luca Flores/Airways
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