Korea Investment & Securities said on the 15th that T'way Air raised close to 400 billion won in capital this year and noted that the pending reshuffle of the aviation market warrants attention. It kept its investment rating at "Neutral (Hold)." T'way Air's closing price the previous day was 1,533 won.
T'way Air raised 200 billion won in Aug. and decided to secure an additional 191.2 billion won next year. Choi Oon, an analyst at Korea Investment & Securities, said, "It plans to raise a total of 191.2 billion won, including 100 billion won through a rights offering allocated to the largest shareholder and 91.2 billion won offered to all existing shareholders," adding, "The number of shares will increase by 52%."
Earlier, T'way Air secured 200 billion won, including 110 billion won through a third-party allocated rights issue and 90 billion won in hybrid capital securities. However, more than 120 billion won evaporated as a net loss in the third quarter alone, leaving only 39 billion won in equity.
Choi said, "The fourth quarter is expected to benefit from the Chuseok holiday effect and a recovery in Japan demand, but Southeast Asia remains weak and Europe is in the off-season, so losses are likely to continue," adding, "By year-end there were concerns of a capital impairment, but Daemyung Sono Group again stepped in to shoulder more than half of the capital increase and move to contain the situation."
Even so, from the fourth quarter the company is expected to narrow its losses. T'way Air has secured up to eight long-haul aircraft, and price regulations by the Korea Fair Trade Commission (FTC) on the two national carriers on European routes have been lifted. It is also flying to Canada and Australia. In particular, Japan routes, which account for the largest share of profit, rebounded starting with the Chuseok holiday.
Choi said, "Things are not going exactly as Daemyung Sono planned, but for other shareholders, thanks to the largest shareholder, a major hurdle has been cleared," adding, "A full-year loss is expected in 2026 as well, so near-term investment appeal is limited, but attention should be paid to the fact that other unlisted LCCs will face even greater difficulties in raising capital."
He added, "The reshuffle of the aviation market is still in its early stages," and "in the long run, there will still be one seat left among FSCs."