EXTRANS GLOBAL - Air Freight News - Week 11 2025

Air Cargo General

1)  Government Plans to Supervise Korean Air's Acquisition of Asiana for 10 Years Regarding Fares and Seats

• The government is set to monitor whether Korean Air is implementing corrective measures concerning airfares and the supply of seats following its merger with Asiana Airlines over the next 10 years.
• The Fair Trade Commission and the Ministry of Land, Infrastructure and Transport held an inauguration ceremony for the implementation monitoring committee at the Government Seoul Building on the 6th to check Korean Air's compliance with corrective measures.
• Korean Air has formed an implementation monitoring committee composed of nine members, who can independently oversee the tasks, selected from experts in fair trade, consumer rights, aviation, and accounting auditing, after consultations with the Fair Trade Commission and the Ministry.
• The committee consists of four aviation experts, two fair trade experts, two consumer rights experts, and one accounting/auditing expert. Members can be reappointed for terms of two years.
• The operation period of the implementation monitoring committee will be 10 years from the date of the merger.
• According to the Fair Trade Commission's corrective measures, the implementation monitoring committee will require Korean Air to provide relevant information or submit materials for the performance of its duties, and may conduct inspections at business sites if necessary.
• Previously, the Fair Trade Commission confirmed corrective measures related to the merger of Korean Air and Asiana after foreign competition authorities completed their reviews last December.
• Based on this memorandum of understanding, the two agencies plan to closely cooperate on matters such as designating alternative airlines for flight schedules and route rights, developing a mileage integration plan, and monitoring airfares and mileage systems.

2)  "E-Commerce Effect" at Incheon Airport Achieves New Records in Sea-Air Combined Transportation

• Last year, Incheon Airport recorded 118,000 tons of sea-air combined transport cargo, growing by 20% compared to the previous year. This marks the highest performance since the airport opened. The previous record was 98,000 tons from the year before.
• Incheon International Airport Corporation analyzed that the growth of the global e-commerce industry has driven this performance. Sea-air transport mainly involves e-commerce goods produced in China being shipped to Incheon by sea and then transshipped by air to destinations worldwide. Incheon Airport benefits from excellent geographical access to China and has the advantage of connecting 192 cities globally, positioning it well as a hub.
• The final destinations of the sea-air cargo that passed through Incheon Airport are primarily in long-distance regions such as North America and Europe. Approximately 50,000 tons and 34,000 tons of cargo passed through Incheon Airport, with regional market shares of 42% and 28%, respectively. However, in terms of cargo volume, regions like Asia, Latin America, and the Middle East saw an increase of 67% from 21,000 tons to 35,000 tons, significantly surpassing the average growth rate of 7% for North America and Europe. The diversification of e-commerce demand from China has led to a substantial increase in the number of destination countries, rising from 35 last year to 47 this year.
• Before departing from Incheon Airport, the main arrival ports for cargo were Incheon Port, Pyeongtaek Port, and Gunsan Port, with cargo volumes of 43,000 tons, 41,000 tons, and 33,000 tons, respectively, accounting for 37%, 35%, and 28%.
• This year, air cargo demand is expected to remain robust. Although overall trade may slow down for a period due to changing tariff policies with the new U.S. administration, the total volume of air cargo transported from China to the U.S. via e-commerce is predicted to remain largely unchanged. Even with ongoing U.S.-China tensions, e-commerce cargo focuses on consumer goods that are less regulated, and the lower unit prices of Chinese consumer goods are expected to minimize the impact of adjustments to duty-free thresholds.
• While SEA & AIR may experience short-term volatility due to U.S. regulations, long-term growth is forecasted.
• Meanwhile, it is anticipated that the restructuring of Asiana Airlines' cargo operations in the second half of this year and the renewal of Korean Air's cargo terminal may lead to supply disruptions.

3) Signs of Instability in E-commerce Demand Detected in February Air Cargo Market - Impact of US Regulations

• In February, the air cargo market continued its overall growth trend, but the effects of tightened e-commerce regulations became apparent.
• According to the latest data from market analyst Xeneta, air cargo demand in February increased by 4% compared to the same month last year, with the dynamic load factor remaining unchanged at 59%, and the average market rate rising by 10% to $2.53 per kg.
• Notably, Shanghai is the first region to feel the impact of reduced e-commerce volumes. Experts suggest that, even considering seasonal factors due to the Chinese New Year holiday and the slowdown in e-commerce demand at the beginning of the year, the temporary abolition of the de minimis tax exemption threshold for Chinese cargo could be a signal reflecting the impact on the air market.
• On the supply side, despite the decrease in e-commerce volumes, available supply increased in Hong Kong and southern China, indicating that Shanghai was likely the first to be hit, and this phenomenon was actually observed in the February market.
• Price increases are expected in markets like Vietnam that are alternatives to China. Some companies may move their supply chains to regions other than China to avoid additional US tariffs, which could lead to increased air freight rates in alternative markets such as Vietnam.
• Meanwhile, as the US pushes forward with plans to impose additional port call fees on Chinese ships, the possibility of disruptions in the shipping market affecting the air cargo market is increasing.
• Amid these changes, airlines and forwarders are expected to inevitably adjust their strategies to respond to market volatility. Airlines may reallocate capacity from the Chinese market to Southeast Asia or transatlantic routes, while freight forwarders are likely to carefully review block space agreements and keep a close eye on market conditions.

4) CMA CGM Plans $20 Billion Investment in U.S. Supply Chain Innovation - Including Expansion of Air Cargo Supply Centered in Chicago

• CMA CGM Group, a global leader in maritime, land, and air logistics, announced a $20 billion investment over the next four years to support the U.S. maritime economy and domestic supply chain innovation as the parent company of APL, a U.S.-flagged carrier.
• Over the next four years, CMA CGM plans to significantly expand the U.S.-flagged fleet, enhance the handling capacity of major container ports on the East and West Coasts, and build state-of-the-art logistics warehouses across the country.
• Additionally, the company revealed plans to establish a large-scale air cargo hub in Chicago to strengthen collaboration with U.S. customers and public institutions.
• First, through this investment program, CMA CGM aims to align with the U.S. government's recent emphasis on strengthening shipbuilding capabilities. The company plans to expand APL's U.S.-flagged fleet, enhance U.S. maritime infrastructure through workforce training and advanced technology adoption, and solidify APL's position as a key carrier responsible for U.S. government cargo transportation. These investments are expected to contribute to achieving U.S. economic and national security goals.
• To expand its U.S. air cargo transportation capabilities, CMA CGM will establish a new air cargo hub in Chicago. The company plans to introduce five new Boeing 777 freighters and build a system operated by U.S. pilots to ensure the reliable transportation of urgent cargo and critical supplies.

5)  GSA and Airline Trends

• Starting May 1st, KLM will increase its flights on the ICN-AMS route from the current 5 flights to 7 flights. KL856 will operate as ICN 22:25 - AMS 05:25+1 using a B777-200.

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