Korean Air recently published its Q1 2020 results, and it is clear that it needs further state aid. The airline has already received aid in early 2020, but that was not sufficient. South Korea’s government has approved to support the airline with an additional one trillion loan to keep the airline afloat.
Photo by Andrew Pries | AeroNewsX
The recently published Q1 results of the South Korean airline say enough. The airline will need further state aid to survive this pandemic. The total revenue decreased by 22.7% compared to the first quarter of last year. The RPK or Revenue Passenger Kilometers has decreased by 29.5%. Cargo revenue on the other has increased by 0.5% and FTK or Freight Tonne Kilometers increased by 3.1%. This might seem like an unimportant revenue stream, but only though cargo, airlines can generate some revenue currently. Therefore, the airline is using its passenger aircraft for freight to maximize cargo operations.
In early 2020, Korean Air received 1.2 trillion won of state aid. This amount was supposed to be sufficient to drag the airline through these tough times. Unfortunately, it is not enough. The airline is not able to survive unless they receive additional support. The South Korean government approved a 1 trillion dollar won deal by issuing governmental- guaranteed bonds as early as the end of this month.
The pandemic will have a major impact in Q2, but the airline expects that demands will slowly return to normal, and revenue will increase again. If domestic air travel demand has returned, the airline will start its scheduled recovery.
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