T’way Air has grown its market share steadily, though that did not necessarily carry through to the bottom line in the third quarter.
T’way Air has grown its market share steadily, though that did not necessarily carry through to the bottom line in the third quarter.
Based on its data, the budget carrier has 18% of South Korea’s LCC market in the three months ended September, down from 18.8% in the second quarter but a notable increase from 16.4% in the third quarter of 2018.
Operating revenue grew by 5.3% to W202.6 billion ($172 million), but operating expenses increased 22.3% to W201.1 billion. Sales and administrative expenses also grew 7.5% to W18.1 billion.
As a result, the carrier slipped into a W16.5 billion operating loss, from a W11.7 billion operating profit in the third quarter of 2018.
Like most of its compatriots, T’way Air reported significant declines from Japanese routes, and the sector accounted for 19.8% of revenues in the recently concluded quarter, compared to 29.1% last year. Services to Europe and China declined marginally though each region makes up less than 5% of revenue.
On the other hand, Southeast Asian routes contributed 37.5% of third-quarter revenues compared to 30.4% last year, while that from Oceania went from 13.5% to 17.2%. Domestic routes were broadly steady at 20%.
Expanding its network in Southeast Asia and Taiwan helped it increase revenues, along with ASK and market share, the carrier says in an investor presentation. It did not, however, provided any further details.
ASK on international routes expanded by 36% year-on-year, which alongside a 33% increase in RPK pushed load factor down by 6.1 percentage points to 80.3%. Yield, however, declined by 24% to W58.
On its domestic network, which accounts for less than 10% of total capacity, ASK rose 4% and RPK 0.4%, resulting in load factor decreasing 2.7 points to 88.3%. Despite that, yield increased marginally to W135
T’way Air reported a W10.9 billion net loss for the third quarter, compared to a W5.3 billion net profit last year, though this was largely due to W19.7 billion in financial losses, largely related to its change from Korean to international financial reporting standards.
