2Q26 OP beat; Record high revenue on strong passenger/cargo amid hiked fuel

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2Q26 OP beat; Record high revenue on strong passenger/cargo amid hiked fuel

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Korean Air

2Q26 OP beat; Record high revenue on

strong passenger/cargo amid hiked fuel

Reiterate Rating: BUY | PO: 36,000 KRW | Price: 25,850 KRW

2Q26 KAL standalone revenue a record high with OP beat 14 July 2026

Korean Air (KAL) reported strong standalone 2Q26 results (non-consolidated under Equity

K-IFRS), with revenue reaching a record high of KRW5,020bn, up 26% YoY and ahead of

our estimates. Growth was driven by both resilient passenger demand (passenger 19%

Key ChangesYoY) despite elevated fuel surcharges, and robust cargo performance (cargo 46% YoY).

Despite a 102% YoY increase in unit fuel costs, operating profit reached KRW262bn (W) Previous Current

(5.2% OPM), beat BofA/consensus estimates, as strong unit revenue growth (21.7% YoY) 2026E EPS 1,026.86 734.57

supported high fuel cost pass-through. However, non-consolidated net profit was 2027E EPS 3,075.65 3,558.91

dragged by KRW depreciation, resulting in a KRW97.3bn net loss in 2Q26. 2028E EPS 4,903.56 5,199.23

Promising summer supported by both out/inbound Amy Han >>

Research Analyst

In 2Q26, KAL observed some moderation in domestic and outbound demand following Merrill Lynch (Hong Kong)

fuel surcharge hikes, while largely offset by robust inbound and transit demand. Int’l unit +852 3508 5344 amy.han@bofa.com

revenue increased 14% YoY, driven by an 11.3% improvement in yields and a 2.1pp

Nathan Gee, CFA >>

increase in load factor. Mgmt. maintained a constructive outlook on inbound/outbound Research Analyst

demand across short-haul/long-haul in summer. We expect KAL to sustain double-digit Merrill Lynch (Singapore) +65 6678 0418

YoY growth in 3Q26E unit revenue, supported by resilient demand and low base.