Air Premia posts first-ever quarterly profit

Air Premia Inc., a South Korean budget carrier, on Thursday reported its first-ever quarterly profit in the third quarter of this year, fueled by a surge in international passenger and cargo traffic.

With the airline industry recovering from the pandemic-induced slump, Air Premia earned 21.7 billion won ($17 million) in operating profit in the July-September quarter on the back of 129.6 billion won in sales.

It marked the first time for the low-cost carrier (LCC) to hit the 100 billion won mark in quarterly revenue since its founding in July 2017.

Its operating profit margin came in at 16.7% for the third quarter of this year.

Assuming it maintains its current profit growth rate for the remainder of this year, Air Premia expects to turn a profit this year for the first time in its history.

Annual sales are forecast at 360 billion won this year, though unexpected external factors such as sharp swings in global oil prices and foreign exchange rates could affect it.

Air Premia operates regular routes to Los Angeles, New York and Frankfurt, as well as charter flights to Barcelona, Spain, and Oslo, Norway.

It transported 479,492 passengers in the first nine months of the year, with an average seat occupancy rate of 86.3%.

The Korea-US routes made a big contribution to its earnings growth. On those routes, Air Premia transported 158,519 passengers, or 33.1% of its total passenger load during the January to September period this year.

Its freight business made up 10.8% of its total sales in the first three quarters of this year, transporting 21,653 tons of cargo.

To expand its route network, Air Premia will launch irregular flights to Honolulu, Hawaii at the end of this year. It also plans to secure two more Boeing 787-9 aircraft and expand its fleet to more than seven planes next year from the current five.

The budget carrier is jointly managed by two Seoul-based private equity firms – JC Partners and AP Holdings, which have a combined 65.7% stake in the airline.

Air Premia is looking to go public by 2026 and secure a fleet of 20 large aircraft by 2030, its CEO Yoo Myung-sub told The Korea Economic Daily in June.

Write to Jae-Fu Kim at hu@hankyung.com
 

Yeonhee Kim edited this article