April 23, 2024

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[THE INVESTOR] Jin Air will maintain steady upturn in profits and growth, said Eugene Investment and Securities on March 7, suggesting a “buy” recommendation and 42,000 won (US$39.50) target price.

It has the capacity to operate large-size aircrafts with efficiency and is showing synergy effects through cooperation with its affiliate Korean Air, said analyst Bang Min-jin adding that it will be able to enjoy profitability and expansion on parity with the market leader.

The low-cost carrier has opted to raise efficiency by suspending some routes in low season and bringing in larger crafts to popular destinations. It is also better equipped to create new demand as it is able to enter longer-distance routes with its large aircrafts, noted the analyst. 

While other rivals cannot introduce a wide range of airplanes due to concerns over rise in maintenance costs, Jin Air can minimize the increase as it can utilize Korean Air’s infrastructure, explained Bang.

The overall LCC industry, meanwhile, is maintaining solid growth, and worries over possibility of oversaturation have eased since the Transport Ministry has declined the application of a new operator last year, said the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)