PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close
Air Busan is set to be absorbed into an integrated Jinair by March 2027, while high fuel costs and a weak won continue to drive earnings volatility.
Jinair, Air Busan, and Air Seoul approved a merger at board meetings on August 21, 2026, targeting the launch of an integrated Jinair on March 17, 2027.
The merger ratio was set at Jinair 1 : Air Busan 0.2862684 : Air Seoul 0.7501939.
FY2025 revenue was KRW 832.6 billion, down from KRW 1,006.8 billion a year earlier, with an operating loss of KRW 4.5 billion and a net loss of KRW 22.1 billion.
In Q2 2026, high fuel costs and a weak won drove an operating loss of KRW 35.5 billion and a net loss of KRW 61.8 billion, reversing Q1's operating profit.
A January 2025 fire at Gimhae Airport ended a 12-year accident-free record and had some impact on fleet operations.
Air Busan was established in 2007, obtained a scheduled air transport license in 2008, and listed on the KOSPI in 2018 as a low-cost carrier jointly funded by Busan City, local business groups, and Asiana Airlines.
The company operates 4 domestic and 24 international routes with a fleet of 21 Airbus aircraft, mainly A320/A321 family models. Revenue mix is estimated at roughly 67.5% international passenger, 25.2% domestic passenger, 7.3% other, and about 0.1% cargo.
Its distinguishing feature is being the only Korean LCC based at Gimhae International Airport in Busan, with a competitive position in short-haul international routes to Japan, Taiwan, and China through schedule advantages and flexible operations.
The introduction of A321neo aircraft is reported to have improved fuel efficiency by roughly 15%. Domestically, Air Busan competes with Jeju Air, Jinair, and T'way Air, among others, in the LCC segment.
However, since August 2026 the company's legal status itself is set to change, following a merger agreement among Jinair, Air Busan, and Air Seoul. Once completed, surviving entity Jinair will assume all of Air Busan's assets, liabilities, routes, and employees, and Air Busan will be dissolved.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩171.4B | -₩11.1B | −6.5% |
| 2025Q3 | ₩176.3B | -₩28.5B | −16.2% |
| 2025Q4 | ₩235.4B | -₩5B | −2.1% |
| 2026Q1 | ₩257.7B | ₩30.4B | 11.8% |
| 2026Q2 | ₩235.3B | -₩35.5B | −15.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩405B | -₩81.3B | -₩150.4B | −20.1% | −118.7% | 869.4% |
| 2023 | ₩890.4B | ₩159.8B | ₩104.1B | 17.9% | 55.7% | 627.0% |
| 2024 | ₩1T | ₩146.3B | ₩2.4B | 14.5% | 1.7% | 919.1% |
| 2025 | ₩832.6B | -₩4.5B | -₩22.1B | −0.5% | −13.7% | 801.0% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Annual results have shown marked volatility. In 2022, Air Busan posted revenue of KRW 405.0 billion with an operating loss of KRW 81.3 billion and a net loss of KRW 150.4 billion.
In 2023, revenue surged to KRW 890.4 billion, turning to an operating profit of KRW 159.8 billion (17.9% margin) and net income of KRW 104.1 billion. In 2024, revenue rose further to KRW 1,006.8 billion, but operating profit fell sharply to KRW 146.3 billion and net income to KRW 2.4 billion.
In 2025, revenue declined again to KRW 832.6 billion, with an operating loss of KRW 4.5 billion and a net loss of KRW 22.1 billion.
On a quarterly basis, after a Q2 2025 net profit of KRW 27.7 billion (despite an operating loss of KRW 11.1 billion), losses continued into Q3 (net loss KRW 50.4 billion) and Q4 (net loss KRW 31.6 billion) of 2025.
Q1 2026 saw a rebound to revenue of KRW 257.7 billion and operating profit of KRW 30.4 billion, though the net result remained a loss of KRW 16.1 billion; Q2 2026 losses widened again, with revenue of KRW 235.3 billion, an operating loss of KRW 35.5 billion, and a net loss of KRW 61.8 billion.
The company attributed this to sustained high fuel costs and expanded foreign-currency translation losses from a weaker won.
Operating cash flow (CFO), meanwhile, stayed positive throughout 2022-2025, at KRW 107.1 billion (2025), KRW 289.2 billion (2024), KRW 281.8 billion (2023), and KRW 113.0 billion (2022), indicating that underlying cash generation persisted despite the swings in accounting profit.
Korea's LCC industry in 2026 has faced a structural squeeze of simultaneous revenue growth and profitability deterioration. As the impact of the Iran conflict intensified in the second quarter, international oil prices rose, causing jet fuel prices to more than double compared with pre-war levels.
Airlines responded by raising fuel surcharges, but the lag between the surge in jet fuel prices and the surcharge increases widened losses. Combined second-quarter operating losses across the four listed LCCs (Jeju Air, Jinair, T'way Air, and Air Busan) were reported to be substantial.
On the demand side, relatively strong outbound demand to Japan has continued, while China routes appear to be recovering amid improved Korea-China relations.
Competitively, once the integrated Jinair launches, its fleet would reach 58 aircraft as of the end of last year, surpassing T'way Air's 46 and Jeju Air's 45 to become Korea's largest LCC, reflecting an industry consolidation underway.
This three-way LCC merger is interpreted as consolidating routes, fleets, and personnel across the group's LCC units to secure economies of scale in line with the Korean Air-Asiana Airlines integration, marking the final stage of the domestic airline industry reshuffle.
The pivotal event ahead is the merger schedule.
The three companies plan to hold extraordinary shareholder meetings in December, targeting the launch of the integrated carrier on March 17 next year, after which they will proceed through required regulatory approvals under the aviation business act following approval at the shareholder meetings.
The key task for the integrated airline's launch is securing a unified Air Operator Certificate (AOC), with Jinair aiming to pass the Ministry of Land, Infrastructure and Transport's safety operation system change inspection before the planned launch date.
Local community factors also remain in play: coordinating interests around maintaining a Busan base of operations and concerns from some Air Busan shareholders remains an unresolved task before the launch.
On the business front, the company has stated it is preparing to launch the Busan-Guangzhou route this year, for which it has secured traffic rights, and plans to flexibly operate capacity on key routes for the third-quarter summer peak season while expanding charter flights on near-distance routes such as Japan and China to pursue a profitability recovery.
The company also said it expects improved financial stability going forward as the exercise of conversion rights on perpetual convertible bonds reduces the burden of fixed interest costs.
Some observers note that since international oil prices declined from June, the lag effect from lower fuel surcharges in July could support earnings, raising the possibility of a results recovery from the third quarter onward.
Air Busan has posted a net loss even on a trailing four-quarter basis (Q3 2025 through Q2 2026), placing it in a range where conventional price-to-earnings comparisons are difficult to apply meaningfully.
On a price-to-book basis, figures vary somewhat depending on calculation methodology, but the stock tends to trade at a certain premium to net asset value, which may partly reflect market expectations about the future direction of earnings.
No dividend was paid in the most recent fiscal year, leaving dividend-related metrics at a low level.
This stock carries a valuation variable distinct from other listed airlines: once the absorption merger is completed in March 2027, shareholders will be converted into Jinair shares at the fixed exchange ratio (Jinair 1 : Air Busan 0.2862684), meaning that going forward, Jinair's own valuation and the progress of the merger process may matter more to the share price than Air Busan's standalone results.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-23
Once the integrated Jinair launches, its fleet is expected to grow to 58 aircraft, making it Korea's largest LCC by scale. Linking Incheon- and Busan-departing routes could strengthen both the capital region and southeastern Korea networks simultaneously.
Integrating reservation systems, maintenance, and training infrastructure could also improve operating efficiency.
Japan routes have maintained relatively resilient demand, while China routes appear to be showing signs of recovery amid improved Korea-China relations. The company has continued to grow its top line through fleet operation normalization and expansion of new charter routes. New route launches such as Busan-Guangzhou are also underway to diversify its route portfolio.
From 2022 through 2025, operating cash flow remained positive every year regardless of accounting profit or loss. This reflects the airline industry's high depreciation weighting, which creates a gap between accounting results and actual cash-generating capacity.
The reduction in fixed interest costs from perpetual convertible bond conversions is also cited as a positive factor for the balance sheet.
Second-quarter 2026 results took a direct hit from a surge in international oil prices and a weaker won, which widened fuel costs and foreign-currency translation losses. A structural weakness was also exposed in the lag between actual fuel price increases and fuel surcharge adjustments, which widened losses. Similar earnings shocks could recur if geopolitical risks resurface.
The merger must pass through multiple stages, including December shareholder meeting approvals and aviation business act authorization, and the possibility of schedule delays cannot be ruled out.
Concerns from the local community and some shareholders over whether the Busan base will be maintained remain an unresolved coordination issue. Unexpected issues could also arise during the safety review process required to secure a unified operating certificate.
As of end-2025, total equity was only KRW 161.2 billion versus total liabilities of KRW 1,291.2 billion, resulting in a very high debt ratio of 801%. The 2025 net loss also raises the possibility of further equity erosion.
Even accounting for the airline industry's characteristic lease-related liability recognition, the capital buffer remains thin.
The merger plan must clear multi-stage procedures including a December extraordinary shareholder meeting and aviation business act authorization. If the process is delayed or conditions change, the targeted launch date of March 17, 2027, could slip. Shareholder actions such as exercising appraisal rights could also create unexpected funding needs.
With reports of international oil prices breaking back above $85 per barrel, fuel cost burdens could increase further. Continued won weakness could also re-expand foreign-currency translation losses.
The lag between fuel surcharge adjustments and actual cost increases is a structural factor that amplifies quarterly earnings volatility.
A January 2025 aircraft fire at Gimhae Airport ended a 12-year accident-free record. Safety inspections and resulting fleet shortages are understood to have had some impact on flight frequency and passenger performance.
If safety review intensity increases during the process of securing a unified operating certificate, additional operational burdens could arise.
Check whether summer peak-season demand and fuel surcharge adjustments improved Q3 results, and whether losses narrowed from Q2.
Confirm whether the merger plan is approved at each company's extraordinary shareholder meeting and monitor shareholder reactions, including the scale of appraisal rights exercised.
Confirm the launch of the integrated Korean Air following the Korean Air-Asiana Airlines merger, a preceding event for the three-way LCC integration.
Monitor progress on passing the Ministry of Land, Infrastructure and Transport's safety operation system change inspection and securing a unified Air Operator Certificate.
The targeted launch date for the integrated Jinair, at which point Air Busan shares would convert into Jinair shares at the fixed exchange ratio and Air Busan would be delisted.
Air Busan faces an absorption merger into Jinair targeted for March 2027, placing judgment on this stock increasingly dependent not just on standalone earnings prospects but on the smooth progress of the merger process itself.
On the earnings front, volatility tied to fuel and FX variables has been pronounced, with profit shrinking in 2024-2025 after the 2023 turnaround and losses widening again in the first half of 2026.
The fact that operating cash flow has remained positive every year underscores a cash-generating capacity distinct from accounting results.
Whether the remaining procedures—the December shareholder meetings, aviation authority approval, and securing a unified operating certificate—proceed smoothly will be the key focus going forward.
While local community opposition and some shareholder concerns appear to have eased compared with earlier, detailed issues such as maintaining the Busan base remain unresolved.
Investors should watch not only the company's own operating results but also Jinair's share price trajectory following the fixed merger ratio and whether the integration timeline is met.
Report written 2026-09-05 · Data as of 2026-09-04
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