[THE INVESTOR] Jeju Air, Korea’s largest low-cost carrier, will see faster growth in earnings from the third quarter of the year, Korea Investment & Securities said.

In the second quarter, Jeju Air is expected to post 162.4 billion won (US$138.7 million) in revenue, up 14.1 percent from a year earlier and 44.6 percent drop in operating income to log 5 billion won, said Yoon Hee-do, an analyst at Korea Investment & Securities said. 



The parliamentary election, which was held in April, slowed air travel demand and dampened the carrier’s Q2 sales, he said.

Jeju Air will benefit from The Value Alliance, a newly formed airline alliance for budget carriers.

From next year, the alliance’s members will operate an airline reservation system called Air Black Box which is expected to boost seat occupancy rate.

Korea Investment & Securities maintained the price target of 38,000 won and a rating of “buy” on Jeju Air.

By Park Han-na (hnpark@heraldcorp.com)