Korean Air: New Buy, Asiana benefits and pricing power being underestimated

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Korean Air: New Buy, Asiana benefits and pricing power being underestimated

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Korean Air

New Buy, Asiana benefits and pricing

power being underestimated

Initiating Coverage: BUY | PO: 36,000 KRW | Price: 23,800 KRW

New Buy: Merger benefits & pricing power tailwinds 09 June 2026

We initiate on Korean Air (“KAL”) at Buy with KRW36,000 price objective based on 1.1x Equity

2027 PBV at 12% 27-28 average estimated ROE. We see clear benefits from Asiana

merger helping to improve KAL’s pricing power for outbound/inbound Korean travel AmyResearchHanAnalyst>>

while further improving KAL’s competitiveness on transpacific transit. More broadly we Merrill Lynch (Hong Kong)

see KAL benefiting from industry trends of improving cargo and resilient passenger +852amy.han@bofa.com3508 5344

pricing power given aircraft supply constraints. The valuation at 0.9x PBV looks Nathan Gee, CFA >>

attractive at a discount to regional peers and close to KAL’s historical average offering a Research Analyst

Merrill Lynch (Singapore)

good entry point to participate in improving earnings beyond the 2Q26 Iran war fuel +65 6678 0418

shock. nathan.gee@bofa.com

Benefits from the Asiana merger yet to come

KAL’s strong market position will be further strengthened by the completion of Asiana Stock Data

merger from late 2026 improving KAL’s pricing power for outbound/inbound travel and

KAL's competitiveness in transpacific transit. The merger could also unlock some Price 23,800 KRW

medium-term cost savings around aircraft, maintenance and ground handling. Price Objective 36,000 KRW

Strong passenger & improving cargo pricing power DateInvestmentEstablishedOpinion 9-Jun-2026B-1-7

KAL should benefit from ongoing strong passenger pricing power underpinned by 52-Week Range 20,950 KRW-29,850