Korean Air (003490) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Korean Air is the country's largest airline, earning its money from passenger and cargo transport, with profit coming from its Incheon-centered international network and its large freighter fleet. In 2025 it consolidated Asiana Airlines as a subsidiary, lifting revenue 41% to ₩25.2 trillion, but taking on the loss-making Asiana pushed operating profit (₩1.11 trillion) and net profit (₩0.78 trillion) lower instead. What stands out lately is that once the merged Korean Air formally launches on December 17 with government approval, there is considerable room to cut costs by unifying routes, maintenance and purchasing, though a debt-to-equity ratio reaching 355% and exchange-rate swings on dollar debt can move net profit sharply from quarter to quarter.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Airlines” (Transportation), a type typically read first through EV/EBITDA.
Airlines carry heavy debt and depreciation tied to their fleets, and capital structures vary widely from carrier to carrier, which distorts simple profit comparisons. That is why EV/EBITDA — enterprise value, which includes debt, measured against pre-depreciation operating earnings — is the first lens.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 386.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 66.1%).
- Revenue rose 41.2% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 2.6% higher than a year earlier.
- ROE is 4.3% (controlling-interest basis). It is above the sector average.
- Operating margin is 4.7%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2020-12-31
Largest shareholder Hanjin KAL 29.27% (individual)
Controlling bloc incl. related parties 32.55%
With the controlling bloc holding 33%, the ownership structure is stable.
🔎 In-depth analysis Reading
Korean Air earns its money by moving people and cargo by air. Revenue has two big pillars. One is international and domestic passenger transport; the other is air cargo, hauling semiconductors, electronics and the like on large freighters. The cargo business in particular strongly supported profit during the pandemic and still serves as an earnings buffer when passenger demand wobbles. Added to this are ancillary businesses such as aircraft maintenance (MRO), in-flight catering and mileage. From 2025, with Asiana Airlines as a subsidiary, the country's No. 1 and No. 2 carriers are brought under one roof.
The latest close is ₩27,500 and the market capitalization is ₩10.1 trillion. The price sits above its 20-day moving average (₩25,975) and above its 60-day moving average (₩26,617). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 57.0, a neutral level. The one-month change is -5.7%, the three-month change is +12.0%, and the position relative to the 52-week high is -8.3%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it outpaced the index by 24.1%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Starting with valuation multiples, the P/E ratio (how many times one year's profit the price represents) is 12.99x and the P/B (price relative to book net assets) is 0.93x, meaning it trades below net assets. ROE (how much it earns on equity in a year) is 7.1%, a decent rate of return on capital. The dividend yield is 2.8% (₩750 per share), which is one of the airlines that actually pays a dividend. On profitability, the operating margin is 4.4% and the net margin is 3.1%. The balance sheet deserves attention. The debt-to-equity ratio is very high at 355.6%, a structural feature of the airline industry with aircraft leases and large borrowings layered on, compounded by consolidating Asiana's debt. The interest-coverage ratio of 1.14x, meaning operating profit barely covers interest, should also be noted. Bringing debt into the picture changes it somewhat. Net debt (total borrowings minus cash) is about ₩20.5 trillion. EV/EBITDA (enterprise value including debt versus pre-depreciation operating cash) is 7.8x, not a burdensome level. EV/EBIT (the same enterprise value versus operating profit), by contrast, is high at 27.9x, largely because 2025 operating profit was depressed by Asiana-integration costs. The FCF yield (cash actually generated relative to market cap) is -2.1%, showing a phase of large investment such as aircraft acquisitions.
The revenue trajectory is clear. Over five years revenue grew from ₩9.0 trillion (2021) to ₩25.2 trillion (2025), at a 29% annual average. The 41% jump in 2025 revenue was largely from beginning to consolidate Asiana Airlines. Profit, though, went the other way. In 2025 operating profit fell 47% and net profit 41%. Revenue rose but profit fell for a clear reason: it took on the loss-making Asiana. The forward (this-year) picture matters here. Q1 2026 operating profit rose 20% year on year, so the core business is recovering. Q1 net profit, by contrast, fell 90%, not because operations worsened but because non-operating items such as exchange-rate swings on dollar debt depressed net profit. In other words, operations themselves are improving, and the swings in net profit come from the exchange-rate variable. This year is the first in which cost-saving effects from the Asiana integration begin to be reflected in earnings in earnest.
The biggest event is the merger with Asiana Airlines. With the government's conditional approval, the company is set to formally launch as the merged Korean Air on December 17, 2026. The merger ratio was set at 0.2736432 Asiana shares per Korean Air share. On top of this, integration of the low-cost carriers (LCCs), combining subsidiaries Jin Air, Air Busan and Air Seoul into one, is under way, with the launch of a merged Jin Air scheduled for March 2027. Once integration is complete, there is more room to achieve economies of scale by pooling routes, maintenance and aircraft purchasing. Separately, the company issued corporate bonds (debt securities) across May and June 2026, showing that its large borrowing structure and funding needs for aircraft acquisitions continue. The dividend is ₩750 per share, holding a payout ratio of around 35.5%.
Korean Air is the only large airline in the air-transport sector making a profit. While same-sector peers Asiana, Jeju Air and Air Busan are all in the red (negative ROE), Korean Air keeps a profit with 7.1% ROE. Even so, its P/B of 0.9x is lower than theirs. Trading below net assets can be read as a sign of undervaluation. The strengths are clear. With passenger and cargo as two pillars it has cycle-defense capacity, and the Asiana integration gives it an overwhelming No. 1 position in the domestic aviation market. If integration synergies translate into cost savings, the profit base widens. The cautions are equally clear. With a 355% debt-to-equity ratio and a 1.14x interest-coverage ratio, it is sensitive to rates and interest costs. With large dollar debt, net profit swings sharply when the exchange rate rises. In short, it is strong when oil prices and the exchange rate are stable and integration synergies come through, but net-profit volatility grows when the won weakens or travel demand falters.
🔎 Valuation vs peers Undervalued
Large and mid-sized airlines among domestic listed air-transport companies whose scale and character are comparable.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Asiana Airlines | 0.00x | 3.07x | -37.94% |
| Jeju Air | 0.00x | 1.23x | -42.30% |
| Jin Air | 0.00x | 1.16x | -13.74% |
| Air Busan | 0.00x | 1.76x | -13.70% |
Among same-sector peers, Asiana (P/B 1.97, ROE -37.9%), Jeju Air (P/B 1.25, ROE -42.3%), Jin Air (P/B 1.19) and Air Busan (P/B 1.08) are all in the red. Korean Air is the only one among them making a profit (7.1% ROE), yet its P/B is the lowest at 0.9x, trading below net assets. On that gap alone it reads as undervalued. The trailing P/E of 12.6x reflects 2025 profit depressed by Asiana-integration costs, so it looks higher than it really is. Given that Q1 2026 operating profit rose 20% year on year and the core business is recovering, there is room to view it on a lower forward multiple. That said, the 355% debt-to-equity ratio and low interest coverage mean this undervaluation partly reflects the market's required discount for financial risk rather than pure cheapness, and that should be weighed too.
Price history Close · MA20 · MA60
The latest close is ₩27,500 and the market capitalization is ₩10.1 trillion. The price sits above its 20-day moving average (₩25,975) and above its 60-day moving average (₩26,617). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 57.0, a neutral level. The one-month change is -5.7%, the three-month change is +12.0%, and the position relative to the 52-week high is -8.3%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it outpaced the index by 24.1%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +24.15% / 6M -3.92% / 12M -40.77%
Key metrics Computed vs whole-market median
Valuation
The P/E is 12.99x. The P/B of 0.93x is in line with the whole-market median (0.84x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 10.4%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 4.3%, above the whole-market average (3.0%). The operating margin is 4.7%. The debt ratio is 386.9%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $11.3B | $12.6B | $17.7B | +41.16% ↑ faster |
| Operating profit | $1.3B | $1.5B | $782.3M | -47.23% ↓ slower |
| Net profit | $745.5M | $925.4M | $547.7M | -40.81% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $6.3B | $9.9B | $11.3B | $12.6B | $17.7B |
| Operating profit | $996.1M | $2.0B | $1.3B | $1.5B | $782.3M |
| Net profit | $405.8M | $1.2B | $745.5M | $925.4M | $547.7M |
| Revenue CAGR | 4-yr avg 29.33% | ||||
Revenue rose 41.2% year over year (2023 ₩16.1 trillion → 2024 ₩17.9 trillion → 2025 ₩25.2 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit fell 47.2% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 29.3%. The two-year revenue CAGR is 25.1%. In the most recent quarter (Q1 2026), revenue was 2.6% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- Revenue grew 41.2% year over year, a sign of growth.
Points to watch
- Debt far exceeds equity (debt ratio 386.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 66.1%).
Recent news & events searched · sourced
- 2026-05-13FilingDisclosure of a merger decision related to the low-cost-carrier integration of subsidiary Jin Air. Part of the process of absorbing Air Busan and Air Seoul into Jin Air to form a merged LCC.Mid-term expectation of efficiency gains in routes, maintenance and staffing from combining the three LCCs. Launch of a merged Jin Air scheduled for March 2027. Source
- 2026-05-29FilingDecision to acquire shares and equity securities of another entity (amended filing). A decision on stake acquisition in the integration process.Tied to organizing the Asiana and LCC integration governance. A short-term cash-outflow factor. Source
- 2026-05-29FilingFiling of a securities registration statement for corporate bonds (debt securities) and finalization of June issuance terms. Funding via large-scale borrowing.Helps secure funds for aircraft acquisition and integration. But a factor increasing debt burden and interest costs. Source
- 2026-05-15EarningsFiled the Q1 2026 quarterly report. Revenue ₩6.66 trillion (+2.6%), operating profit ₩0.517 trillion (+20.0%), net profit ₩33.7 billion (-90.4%).Confirms recovery in the core business (operating profit). The plunge in net profit reflects non-operating factors such as the exchange rate, with high volatility. Source
- 2026-06-10IRNotice of an investor briefing (IR). A session for the company to explain results and strategy to investors.A communication channel to share integration progress and the earnings direction with the market. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-06-10Disclosure
- 2026-06-10Disclosure
- 2026-06-05Disclosure
- 2026-06-05Amended filing
- 2026-06-01Large-business-group status disclosure (amended)
- 2026-05-29Disclosure
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Amended filing
- 2026-05-29Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-14Material-fact report (amended)
- 2026-05-13Merger decision
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.