SWOT analysis

Internal Strengths

• Efficient and diverse fleet - a range of 127 Boeing and Airbus aircraft. The main aircraft types are Boeing 787, 777 and 747.

• Passenger business recovery post-pandemic - increase in vaccinations and self-quarantine lift means that more passengers can travel with ease.

• SkyTeam alliance - SkyTeam is a global alliance currently serving 588 million annual passengers, 15,700 daily flights in 1,064 destinations (SkyTeam, 2022).

• Korean Air and Asiana merger - to help stabilise the Korean aviation industry, Hanjin KAL and Korean Air acquired Asiana Airlines. This will result in route expansion, fleet and capacity, and give the airline a more competitive edge to compete with global airlines (Korean Air Newsroom, 2020).
  

Internal Weaknesses

• Employee conflict - Korean Air ordered to pay £14,000 in compensation to an employee, who was discriminated against by the Cho family (Korean Air’s founding family). This can lead to a lack of trust in the company and lack of brand trust for the passengers.

• Low net margin - Korean Air’s net margin has remained under 10% over a 5 year period. A net margin below 10% is considered low, therefore the airline needs to work harder at becoming more profitable.
  

External Opportunities

• Expand and take larger market share through acquisitions - In 2019, Korean Air accounted for 22.4% of international seats in the South Korean market, and Asiana held 15.4%. Together, they can provide around 38% of the entire market and serve more routes.

• Growing tourism in South Korea - Tourism is steadily increasing, accounting for 4.7% of GDP. The largest visitor flows are from China and Japan, making up 50.4% of total international arrivals to Korea in 2018 (OECD, 2019).

• Amazon Cloud technology - Korean Air is the first major airline to integrate its IT infrastructure to Amazon Web Services Korea LCC. It will give Korean Air a more competitive edge in the future.
  

External Threats

• Pandemics and outbreaks - The COVID-19 pandemic greatly impacted the aviation industry. Korean Air reported 27,610 thousand passengers in 2019, compared to 5,589 thousand passengers in 2021. Airlines need to be strategically prepared for future pandemics and outbreaks that are uncontrollable.

• Increasing competition in Korean aviation from the LCC market - Low Cost Carriers are dominating the airline industry. There are many LCC’s operating in South Korea. In 2017, LCC’s held a 26.41% share of international air passenger traffic, and 31.5% in 2018 (Statista, 2021). Their share is continuing to increase over time. Korean Air needs to stay competitive in the market.