Due to the exchange rate of the won against the U.S. dollar (won-dollar exchange rate) and the decline in international oil prices, airline stocks, which are considered to be representative beneficiary sectors, are showing strength.
Korean Air shares were traded at 22,500 won on the KOSPI market at 9:27 a.m. on the 7th. The stock price rose by 7.14% (1,500 won) compared to the previous trading day. At the same time, Asiana Airlines' stock price also increased by 3.81% (360 won) to 9,810 won.
Low-cost carriers (LCCs) are also showing strong performance. AIR BUSAN is experiencing a stock price increase rate of around 8%, while JIN AIR, Jeju Air, and T’way Air have seen stock prices rise by about 3% to 5%. The exchange rate and international oil prices appear to have stimulated investor sentiment.
In the Seoul foreign exchange market, the won-dollar exchange rate started trading at 1,380 won on that day. This is the lowest level in six months. For airlines that must pay aircraft lease fees and other expenses in dollars, a decrease in the won-dollar exchange rate reduces cost burdens. It could also contribute to overseas travel demand.
International oil prices, which account for a significant portion of airline expenses, are also weak. Overnight, at the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for June delivery settled at $59.09. Although this reflects an increase of 3.43% ($1.96) from the previous trading day, it is still below the $60 mark.