EXTRANS GLOBAL - Air Freight News - Week 01 2025

Air Cargo General

1) Air Busan accelerates integration as a low-cost carrier with a large number of executives from Korean Air

Regional hub airline Air Busan has undergone a management change just eight months after the new CEO took office. With many executives from Korean Air now in place, it appears that Korean Air is accelerating the launch of an integrated low-cost carrier (LCC) following its merger with Asiana Airlines.
According to the Financial Supervisory Service's electronic disclosure system on the 29th, Air Busan will hold an extraordinary shareholders' meeting on the 16th of next month to appoint Jeong Byeong-seop (Executive Director) from Korean Air's Passenger Sales Department and Song Myung-ik (Executive Director), head of the Corporate Merger Task Force, as inside directors, and Seo Sang-hoon (Executive Director), head of the Financial Controller at Korean Air, as a non-executive director.
Jeong Byeong-seop, who has been nominated as CEO, previously served as the branch manager of Korean Air’s US East Coast office and head of the Schedule Operations Department, and is currently in charge of the Passenger Sales Department at Korean Air. Air Busan explained in its disclosure that "he has sufficient experience and knowledge regarding airline management, and it is expected that he will fairly perform the duties of deliberation and decision-making on important management matters at the board, contributing to enhancing Air Busan’s competitiveness."
Song Myung-ik has previously served as the head of Korean Air’s Southeast Asia headquarters and is currently the head of the Corporate Merger Task Force, with plans to become the head of Air Busan’s Sales Division. Air Busan stated that "as the head of the Corporate Merger Task Force, he is expected to make significant contributions to the integration efforts of Air Busan."
With the new executives at Air Busan focusing on integration, the long-standing demands from the local community for the preservation of Air Busan’s presence in Busan have become increasingly uncertain.
A meeting between the mayor of Busan and the chairman of Korean Air, initially anticipated for later this month, has reportedly been postponed to next month due to personnel movements at Korean Air and specific practical negotiations, adding to the anxiety.The local community had hoped for the establishment of the integrated LCC headquarters in Busan, as mentioned by the Ministry of Land, Infrastructure and Transport during the announcement of the merger between Korean Air and Asiana Airlines. However, as the government withdrew its involvement, citing corporate issues, the focus shifted towards a separation sale, with the local community consistently demanding the preservation of Air Busan in Busan.
Recently, a comprehensive task force (TF) composed of the city, Busan Chamber of Commerce, and civic groups proposed the operation of an independent corporation for the preservation of the regional hub airline. Some civic groups continue to demand a separation sale, and the local community's calls for the preservation of Air Busan in Busan show no signs of abating.

2) Korea-Vietnam AEO Mutual Recognition Agreement – Expectation for Fast Customs Clearance for Our Companies

Exports from our companies to Vietnam are expected to become smoother in the future.
On the 26th, the Korea Customs Service announced that it signed a Mutual Recognition Agreement (MRA) for Authorized Economic Operators (AEO) with Vietnam, which is one of Korea's three largest trading partners, on the 24th.
AEO (Authorized Economic Operator) refers to companies that have been certified for excellence by customs authorities based on their compliance with regulations and logistics safety management capabilities.
The AEO MRA is an agreement between customs authorities that recognizes an 'Authorized Economic Operator' certified in one country as a recognized entity in the other country, granting benefits such as expedited customs clearance. Currently, Korea has signed AEO MRAs with 24 countries, including the United States, Japan, and China, with Vietnam being the 25th.
Discussions for the AEO MRA between the two countries began in 2016 but were stalled for a long time due to the COVID-19 pandemic.
It was only after the Korea-Vietnam summit held last year that discussions were smoothly resumed.
AEO companies handle about 57% of exports to Vietnam, which amounts to $30.3 billion, so the signing of this Korea-Vietnam AEO MRA is expected to significantly enhance the export competitiveness of our companies.
In particular, with this AEO MRA, Korea has achieved the milestone of signing AEO MRAs with all ten of its major trading partners.
Koh Kwang-hyo, head of the Korea Customs Service, emphasized, "Vietnam is our third-largest trading partner and an important economic cooperation partner," and expressed hope that the signing of this Korea-Vietnam AEO MRA would help expand our companies' exports and strengthen their global competitiveness.
Nguyen Van Tu, head of the Vietnam Customs General Department, stated, "I hope this AEO MRA will accelerate economic cooperation between the two countries and lead to new achievements for AEO companies in both countries."
The Korea Customs Service plans to expedite follow-up measures for the implementation of the Korea-Vietnam AEO MRA so that our AEO companies can quickly receive the customs benefits associated with it. Additionally, it aims to strengthen customs cooperation based on the AEO supply chain established with major trading partners and to continue expanding AEO MRAs to create a favorable trade environment for our export companies.

3) India's Air Cargo Market Expected to Grow with a Target of 10 Million Tons Annually by 2030

According to AIR CARGO WEEK, a specialized media outlet for air logistics, the Indian air cargo market, which has achieved successful results this year due to a surge in e-commerce demand and expansion in the manufacturing sector, is expected to continue its growth next year.
Global airlines and forwarders are all providing positive evaluations of the potential of the Indian air cargo market, anticipating sustained growth in the future.
IndiGo, India’s largest private airline, has recorded its best-ever performance this year and is preparing various strategies to maximize market growth opportunities for next year.
In particular, IndiGo set a new record by transporting more than 37,000 tons of cargo in October alone and expects this upward trend to continue into 2025. Accordingly, IndiGo is promoting the introduction of wide-body aircraft like the A350, in addition to the three modified A321 freighters currently in operation, aiming to expand its global cargo network.
The recently established thrice-weekly cargo flight route connecting Kolkata and Ezhou in Hubei Province, China, is part of this strategy.
India's air cargo volume is projected to reach approximately 3.6 to 3.7 million tons in the fiscal year 2024-25, an increase of 9-11% compared to the previous year. Additionally, bolstered by the rapid growth of e-commerce, India aims to handle 10 million tons of air cargo annually by 2030.
Forwarders expect that airlines will enhance efficiency and innovation in response to increasing demand, allowing them to maintain sufficient profitability in the market.
In particular, the soon-to-open Navi Mumbai International Airport is expected to inject new vitality into the Indian air cargo market. This new airport is evaluated to alleviate congestion at the existing Mumbai airport and provide advanced infrastructure to improve logistics flow.
However, fresh produce shippers are struggling to maintain quality due to high air freight rates, a lack of cold supply chain infrastructure, and delays in customs clearance. They point out that measures to improve airport efficiency, streamline customs procedures, and strengthen cold supply chains are urgently needed.

4) Ti Report: Asia-Pacific Expected to Record an Average Annual Growth Rate of 7.5% by 2028

The global parcel market, which has recorded steady growth since 2020, is being led by the Asia-Pacific region.
Recently, the logistics market research firm Transport Intelligence (Ti) reported that the global parcel market has achieved a compound annual growth rate (CAGR) of 5% from 2020 to the present, with a market size of approximately €449 billion ($470 billion) in 2020. In 2021, driven by a surge in online shopping demand worldwide, the market skyrocketed to €594 billion.
In 2022, growth temporarily slowed, but a recovery was observed in 2023, with projections for 2024 indicating a growth of 5.1%, reaching €545 billion.
This growth is attributed to the "increase in e-commerce activities and the growing demand for efficient logistics solutions," although it is noted that there are significant differences in growth rates by region.
Specifically, the Asia-Pacific market holds the largest share of the global parcel market in value terms, with predictions of a 7.7% growth in the regional express and parcel market this year, while the North American and European markets are expected to grow at rates of only 3.2% and 3.5%, respectively.
Accordingly, Ti forecasts that the Asia-Pacific market will lead global parcel market growth with the highest growth rate of 7.5% on average annually by 2028.
A representative stated, “The continuous growth of the Asia-Pacific market is being accelerated by the explosive expansion of e-commerce and technological innovations in delivery within the region,” predicting that the market, valued at approximately €215 billion in 2024, will expand significantly to €288 billion by 2028.

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