 |
Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, Aug. 11 — South Korean low-cost carrier Jin Air reported a return to the red in the second quarter, weighed down by seasonal demand weakness, intensified competition, and external factors such as climate-related disruptions.
According to the company’s preliminary consolidated results filed with the Financial Supervisory Service, Jin Air posted revenue of 306.1 billion won (US$228 million) and an operating loss of 42.3 billion won for the April–June period. This compares with 308.1 billion won in revenue and 900 million won in operating profit a year earlier. Revenue declined 0.7% year-on-year, while operating profit swung to a loss.
For the first half, revenue fell 2% year-on-year to 723.9 billion won, and operating profit dropped 83.9% to 16 billion won. Net income halved to 30 billion won from 62.4 billion won over the same period last year.
Jin Air cited the airline industry’s traditional off-season in Q2, combined with a high base effect from last year’s post-pandemic travel boom, as key factors. Additional headwinds included rumors of earthquakes in Japan, concerns over tsunamis, adverse weather in Korea, and extreme heat in Southeast Asia, all of which dampened travel demand. Higher operating costs from increased capacity and currency volatility further pressured earnings.
Operational data shows supply outpacing demand. Available seat kilometers (ASK) rose 5% year-on-year to 2.878 billion km, while revenue passenger kilometers (RPK) increased only 4% to 2.524 billion km, pushing the load factor down 0.8 percentage points to 88.1%. Average fares remained flat at 87 won per kilometer.
Despite weaker profitability, Jin Air’s financial position improved. The debt-to-equity ratio fell to 365% at the end of June from 431% at the end of 2023, reflecting debt repayment, reduced lease liabilities, and capital reinforcement during the first half. The company said it remains committed to strengthening financial stability while navigating a challenging operating environment.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
