By Lee Hyo-sik
Staff Reporter
Korean Air, the nation's largest airliner, will likely emerge as a winner from the unprecedented worldwide economic slump in the Asia-Pacific region, on the back of a stronger won and the rapidly rebounding Korean economy, Daewoo Securities said Friday.
The airline firm is also expected to benefit from the imminent collapse of its Japanese rival, Japan Airlines, and other troubled Asian carriers, it said, adding the company will expand its passenger and cargo handling capacities to meet growing transport demand.
``Most Asian airline companies were hit hard by surging oil prices and the global economic downturn in 2008, and by the spread of the H1N1 flu virus in 2009. They posted huge losses for two consecutive years as people refrained from traveling. As a result, Japan's largest carrier, Japan Airlines, found itself in deep trouble, while other Asian airlines have been supported by their respective governments,'' Daewoo Securities analyst Shin Min-seok said.
In December, Japan Airlines turned to the government for financial help after incurring large losses over the past few years. It has been placed under the state restructuring agency ― the Enterprise Turnaround Initiative Corp. ― but the government has decided not to provide fresh loans to the debt-ridden airline.
The company is widely expected to file for bankruptcy protection in the near future, causing large losses to creditors and shareholders.
Shin said the global airline industry will recover this year in line with the economic rebound and the easing of the flu epidemic, adding Korean Air and Asiana Airlines will see their bottom lines improve significantly. ``In particular, Korean Air will soon get new large-sized cargo and passenger airplanes, benefiting from a pickup in air travel. But other Asian air carriers will not be able to expand their transport capacity,'' he said.
Shares of Korean Air closed at 60,200 won Friday, up 1,500 won, or 2.56 percent, from the previous trading day. Daewoo Securities expects its share price to go up to 74,000 won.
Shin also said the nation's second-largest air carrier, Asiana Airlines, will likely post an operating profit in the fourth quarter of 2009. ``The company has and will benefit from improving economic conditions and the strengthening of the local currency as more Koreans travel overseas this year. Despite Kumho Asiana Group's trouble, it will likely see improved earnings down the road.''
The securities firm expects shares of Asiana Airlines to reach 5,000 won. On Friday, it closed at 3,895 won, up 140 won, or 3.73 percent, from Thursday's close.