Air Busan swings to operating profit in Q3 as sales jump 41%

Air Busan swung to an operating profit in the third quarter, driven by a recovery in passenger demand and an expansion of flight operations. Sales rose 41 percent from the same period last year, and a strengthening won against the dollar improved foreign-currency translation gains, lifting net profit for the period to 73 billion won ($54.4 million).

Air Busan disclosed Wednesday that it posted sales of 247.8 billion won and an operating profit of 4.7 billion won in the third quarter. Sales climbed 41 percent from 176.3 billion won in the same quarter last year, while the operating result reversed from a loss of 28.5 billion won in the third quarter of last year to a profit.

Net profit for the period also turned around, from a loss of 50.4 billion won in the same period last year to a gain of 73 billion won. Although both operating profit and net profit were in the black, net profit exceeded operating profit by 68.3 billion won.

Air Busan said the improvement in non-operating income — including foreign-currency translation gains stemming from the won's appreciation against the dollar — contributed to the increase in net profit. The gap reflects the difference between operating profit earned through its core air-transport business and net profit, which incorporates exchange-rate movements and other factors.

The sales increase was driven by an expansion in flight supply. Against a backdrop of steady passenger demand, Air Busan added charter flights and normalized aircraft operations, allowing its business scale to recover.

Higher fuel costs weighed on operating expenses amid elevated oil prices, but the growth in sales was enough to deliver a third-quarter operating profit. The operating margin stood at roughly 1.9 percent, however, leaving room for further improvement in profitability.

The cumulative result for the first three quarters of this year remains in the red. Sales for the period totaled 740.9 billion won, up 24 percent from 597.2 billion won a year earlier. Operating income, however, swung from a profit of 500 million won last year to a loss of 400 million won this year. Net profit for the same period also turned from a gain of 9.5 billion won to a loss of 4.9 billion won.

Air Busan plans to expand international routes departing from Gimhae Airport in the fourth quarter to capture winter overseas travel demand.

The airline will increase charter flights to destinations including Ibaraki and Kagoshima in Japan and launch new routes to Chiang Mai in Thailand and Guangzhou in China. The Busan–Chiang Mai route in particular will begin operating four times a week from Nov. 11, with plans to increase frequency to six times a week during the peak winter season.

Oil prices and exchange-rate volatility, however, remain risk factors for the rest of the quarter. Air Busan said it expects external uncertainties — including tensions in the Middle East — to persist, and will focus on improving operational efficiency and managing costs.

Meanwhile, Air Busan is also pursuing a merger with Jin Air and Air Seoul. Under a merger agreement signed in August, Jin Air will absorb both carriers, with the combined airline targeting a launch on March 17 next year.