Korean Air’s cargo traffic fell 5.9 percent in the third quarter, and the world’s largest international freight airline said it expects a deep slowdown in high-tech shipments out of Asia to persist.
Air exports of information technology products out of Korea fell 13 percent year-over-year in the quarter ending Sept. 30, the airline said in its financial report on the period, far offsetting gains in exports from the United States and Europe.
The slide in the cargo business, which makes up about a quarter of Korean Air’s overall revenue, helped send the airline to a $462 million net loss in the quarter.
The freight decline also defied historical trends by accelerating during the quarter, with traffic falling 9.2 percent from July to September. Korean also cut capacity at an accelerating pace during the quarter, leaving overall freight lift down 4.6 percent compared to the third quarter of 2010.
That helped keep pricing relatively strong, as yield expanded 3.9 percent year-over-year.
But the carrier saw export demand out of Asia falter even beyond its home market. China’s share of Korean Air’s cargo revenue fell from 26 percent a year ago to 21 percent in the most recent quarter.
Korean said the new free trade agreement between the United States and South Korean should provide a boost to air cargo traffic. But “slow demand of IT products is expected to continue” in the fourth quarter, the airline said.