Korean Air has reported a $219 million operating profit for 2020 despite the COVID-19 pandemic decimating travel demand and grounding planes around the world. Some airlines in the United States have already reported massive losses and carriers across Europe and elsewhere are expected to follow suit in the coming weeks.
Korea’s largest airline group, however, says despite the damage done to passenger demand, the demand for air cargo soared during the pandemic. In particular, Korean Air found itself shipping Coronavirus testing kits and car parts from the likes of Hyundai and Kia around the world.
Unlike the botched rollout of Covid diagnostic kits in the United States at the start of the pandemic, Korea led the way in mass community testing using cheap and quick testing kits. Many countries relied on Korea to manufacture the kits because local production facilities were few and far between.
While passenger sales plummeted by 74 per cent, Korean Air saw a 66 per cent rise in cargo sales throughout 2020. The airline already operates a fleet of freighter-only aircraft and put idled passenger planes into action as cargo planes by ripping out seats and put freight in the passenger cabin.
Despite its success, Korean Air still reported a net loss for 2020, although losses narrowed last year. The airline said sales of its in-flight catering business and a Duty-Free subsidiary helped to pay off some of its debts.
On Wednesday, the International Air Transport Association (IATA) described 2020 as the “worst year in history for air travel demand”. On average, international travel demand dropped by over 75 per cent, while domestic demand was slashed by nearly half.
With renewed travel restriction, continuing lockdowns and the threat of vaccine-resistant variant’s of the COVID-19 virus, advanced ticket sales for this year remain down by 70 per cent compared to the year before. IATA believes demand will recover to around half of 2019’s levels.
