BLACKPINK Appears On Boeing 777 But Korean Q1 Profit Dives
On the same day, Korean Air unveiled a 777 adorned by BLACKPINK and announced its operating profit fell by 47% in Q1.
Last Wednesday, news came out of Korean Air that brought together the disparate worlds of K-pop and high finance. K-pop sensation BLACKPINK is now adorning one of the airline’s 777s, and Korean Air reported its profit tumbled in the first quarter of 2023. Perhaps these two subjects are best dealt with separately.
The official sponsor of BLACKPINK’s world tour
On Wednesday, Korean Air hosted an event to showcase a new special livery in support of South Korea’s bid to host the World Expo 2030. This was no ordinary event, with the airline welcoming the Prime Minister of the Republic of Korea, Han Duck-soo and Jang Sung-min, Senior Secretary to the President of Future Strategy, along with other dignitaries and airline top management.
The event was held in one of Korean Air’s hangars at Seoul Incheon Airport, where the Boeing 777-300ER featuring BLACKPINK was unveiled. The Prime Minister obviously liked the 777 as he said that the new livery is a testament to Korea’s vibrant and influential cultural scene that has captivated the world, adding:
“The bid takes a concerted effort, and I want to thank Chairman Cho and the Korean Air team for taking this initiative in steering the bid effort. We look forward to seeing the Korean Air livery making stops around the world to exhibit the nation’s resolve to host the World Expo in Busan.”
Korean Air Chairman and CEO Walter Cho believes that hosting the World Expo is a great opportunity to push Korea’s presence on the world stage and that the airline is proud to play its role in the bid. In March, Korean Air signed a partnership agreement to officially sponsor BLACKPINK’s world tour, although this is not their private jet for the tour. With massive global recognition and a fan base of more than 1.5 million devotees, BLACKPINK is an ideal brand ambassador for the bid.
The aircraft is a five-year-old Boeing 777-300ER, registration HL7204 and carries MSN 60380. After the festivities, it got down to work on Thursday, leaving Seoul Incheon at 12:07 on flight KE901 to Paris, landing at Charles De Gaulle Airport (CDG) at 18:11. Since then it has operated return trips to Frankfurt Airport (FRA) and San Francisco International Airport (SFO), and tomorrow will head for Boston Logan International (BOS).
First quarter revenue is up but profit is down
For the first three months of this year (Q1 2023), Korean Air generated total revenues of $2.45 billion, a 14% increase from the same period in 2022. Passenger revenue climbed by 394% to $1.362 billion, but cargo revenue was cut in half to just $805 million, with other revenues adding $283 million.
As we have seen at other airlines, operating costs, largely driven by higher fuel prices, escalated faster than revenue growth. Total operating expenses rose by 38% compared to Q1 2022, way beyond the 14% revenue growth and leaving an operating profit of $318 million, a 47% decrease from last year’s return.
The fuel bill for the quarter rose by 51% to $770 million, which was a combination of higher prices, extra consumption and foreign exchange rate impacts. Net income for the quarter was $272.6 million, a 35% drop from the $417.2 million in Q1 2022.
Korean Air said that strong travel demand has been fueling the steady recovery in capacity and passenger numbers, with passenger revenue “almost recovered to pre-COVID levels of Q1 2019 and is on its path to normalization.” The carrier also expects demand to “rapidly recover further in Q2” due to the relaxation of global travel restrictions. To capture that growing demand the airline is adding more capacity and “responding flexibly.”
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At the end of Q1, the Korean Air fleet stood at 156 aircraft, including 23 freighters. The widebody fleet contained 97 aircraft, made up of Airbus A380s and A330s and Boeing 747s, 777s and 787s. It also included 18 Boeing 737s, five 737 MAX 8s, three Airbus A321neos and 10 A220s. Korean Air also had four Boeing 747Fs, seven 747-8Fs and 12 777Fs in its freighter fleet.
