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THE INVESTOR
April 04, 2020
Big Reunion

Stocks & Bonds

[EQUITIES] ‘Jeju Air faces stiff competition’

  • PUBLISHED :November 07, 2018 - 11:23
  • UPDATED :November 07, 2018 - 11:23
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[THE INVESTOR] Jeju Air’s profits will decline from deepening competition, said Eugene Investment and Securities on Nov. 7 downgrading the recommendation to a “hold” from a “buy” and lowering the target price to 39,000 won (US$34.82) from 42,000 won.




The growth of passengers for Korean low-cost carriers is gradually slowing down, while competition will heighten as airlines expand their fleet and the government is due to grant approval for a new entrant next year. Jeju Air’s third-quarter earnings were in line with market consensus with 349.5 billion won revenue and 38.1 billion won operating profit as it managed to defend its passenger fares being the high season, said analyst Bang Min-jin. 

However, in the next quarter, most of the budget carriers will be under pressure to lower their fares. Its operating profit in the fourth quarter will decline 20.2 percent on-year to 14.1 billion won, she said, adding that price competition will begin in earnest next year.

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

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