[Edaily Reporter KIM YOON-JEONG ] Hana Securities assessed that while jet fuel prices have surged due to the fallout from the war in the Middle East, rising freight rates are offsetting this and helping to shore up earnings for KoreanAirLines(003490). The firm maintained its “Buy” rating and raised its target price to 38,000 won.

On the 23rd, Ahn Do-hyun, an analyst at Hana Securities, stated, “Despite jet fuel prices doubling compared to pre-war levels due to the conflict, we forecast a standalone operating profit for KoreanAirLines in the second quarter.” He explained, “This is because cargo rates rose 40% year-over-year (YoY), and cargo volume increased by 3%, which is sufficient to offset losses in the passenger segment.”
Hana Securities estimated that KoreanAirLines’ second-quarter international passenger revenue would reach 2.508 trillion won, a 10% increase year-over-year, while passenger fares would rise 7% to 133 won per kilometer.
The cargo segment is expected to show even steeper growth. Analyst Ahn projected that cargo revenue would reach 1.515 trillion won, a 44% increase year-over-year.
However, the burden of fuel costs was seen as a drag on earnings. With fuel costs expected to rise 94% year-over-year, leading to a 32% increase in operating expenses, second-quarter standalone operating profit is estimated to fall 84% year-over-year to 64.7 billion won, with an operating margin of 1.3%.
Analyst Ahn explained, “A loss in the passenger segment during the second quarter is inevitable,” adding, “This is because most revenue is generated from tickets issued before the war.” He continued, “Starting in the third quarter, we expect the passenger segment to return to profitability due to rising fares on routes to the U.S. and Europe.”
The firm forecast that profitability improvements would gain momentum in the second half of the year. Analyst Ahn analyzed, “As peace talks progress, jet fuel prices are expected to continue their gradual decline. Furthermore, in the third quarter, revenue from tickets issued after the war will be fully reflected in the revenue mix, driving revenue growth to 24% year-over-year (YoY), which should largely offset the increase in costs.”
Hana Securities estimated KoreanAirLines’ standalone operating profit for the third and fourth quarters at 3545억 won and 4674억 won, respectively. Accordingly, the firm projected that the company’s full-year operating profit for 2026 would amount to 1조4030억 won, representing a mere 9% year-over-year decline.
The firm also highlighted the benefits of the merger with Asiana Airlines. Analyst Ahn explained, “KoreanAirLines recently announced at a shareholder briefing that the merger is expected to generate annual synergies of approximately 3000억 won through increased revenue and cost savings,” adding, “The most significant expected benefits of the merger include more efficient fleet allocation through schedule optimization and enhanced bargaining power with airports and OEMs.”
He stated, “Hana Securities estimates that Asiana Airlines will contribute 416 billion won in annual operating profit by 2027,” adding, “The merged airline’s operating profit in 2027 is projected to reach 2.2 trillion won, with earnings per share (EPS) and book value per share (BPS) expected to reach 3,678 won and 31,179 won, respectively.”
He added, “Taking into account the launch of the merged KoreanAirLines on December 17, 2026, and the synergies from the merger, we are raising the target price to 38,000 won and maintaining our ‘Buy’ investment rating.”