South Korea’s No.1 full-service carrier Korean Air Lines Co. expects a surprise earnings growth in the third quarter on robust air freight business and strengthened rates amid protracted port congestion.
According to KB Securities Co., its third-quarter operating profit is estimated to reach 347.4 billion won, about 200 billion won larger than the average market consensus of 143.2 billion won.
Passenger travel still remains at standstill, but the full-service carrier has benefitted from strengthened air freight rates.
According to data from TAC Index, air freight rates from Hong Kong to North America averaged $10.52 per kilogram last week, gaining 8.4 percent from a week earlier and more than doubling from a year ago. This is the first time the rates have exceeded $10 since related data started being compiled in 2015.
The average rates from Shanghai, China to Los Angeles, the U.S. surged to $11 per kilogram during last week.
Freight deliveries have kept the airliner busy amid port congestion and continued shipping delays. With a number of cargo ships clogging key ports and threatening global supplies, container freight rates also rose to record highs for the past 19 weeks in a row.
Korean exporters now are struggling more to secure available vessels and containers to load cargoes, rather than shouldering the rising shipping costs.
Strengthened quarantine at Chinese ports amid outbreaks of Covid-19 variant also caused delays in freight deliveries and fanned increases in rates.
On Thursday, shares of Korean Air Lines closed 3.79 percent higher at 34,200 won ($28.89) in Seoul trading.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]