Air Cargo General

1) T'way Air Temporary Shareholders Meeting D-11

• Daemyung Sonoh Group is facing difficulties as it nears the final acquisition of T'way Air. The approval from the Fair Trade Commission (FTC) for the corporate merger is delayed longer than expected, increasing the likelihood that the temporary shareholders meeting scheduled for 11 days from now will be postponed again. Some predict that the results will only be available after the presidential election on June 3.

• T'way Air is set to hold a temporary shareholders meeting on the 23rd to propose the appointment of new director candidates from Daemyung Sonoh.

• Chairman Seo Jun-hyuk of Daemyung Sonoh Group is listed as a non-executive director, along with three internal directors: Lee Sang-yoon, Ahn Woo-jin, and Seo Dong-bin, as well as two other executive directors: Lee Kwang-soo and Lee Byeong-cheon. Additionally, three outside directors — Kim Jong-deuk, Yeom Yong-pyo, and Kim Ha-yeon — will be appointed to form an audit committee.

• Daemyung Sonoh planned to complete the board composition during the regular shareholders meeting of T'way Air held at the end of March, but the delay in the FTC's merger approval has hindered this. The FTC has been reviewing the merger between Sonoh International and T'way Air since early March.With just over ten days left until the temporary shareholders meeting, the lack of a decision from the FTC regarding the merger approval heightens the possibility of another postponement.

• The FTC's review period is 30 days from the date of notification, extendable up to 90 days if necessary. If the 90-day period is reached next month, it could push the decision further. The time taken to supplement inadequate materials is excluded from the review period, which could also extend the timeline further.

• To expedite the merger approval, Daemyung Sonoh has decided to sell its 62,856,278 shares (22%, co-held with JC Partners) in Air Premia, which was a hurdle in the merger review, but has yet to receive the FTC's results.

• Daemyung Sonoh plans to postpone the meeting if the results are not available before the temporary shareholders meeting. A representative stated, "We are still waiting for the FTC's approval results, and after one request for additional documents, there have been no further requests. If the results do not come out before the temporary meeting, we will postpone it."

• However, some speculate that the delay in the merger review is due to the presidential election on June 3. From the FTC's perspective, approving the merger hastily could lead to accountability issues if problems arise.

• Additionally, given T'way Air's high debt ratio (542% as of the end of last year), there are concerns about continuous funding. Some anticipate that the full 90 days will be utilized.

• "From the FTC's standpoint, there is no need to rush the merger approval, so they are likely to exhaust the given time before announcing the results," indicating that there are many other cases that need approval in line with the new government's inauguration, suggesting the full 90-day period will likely be utilized.

2) Airline Listed Companies Brand Reputation May 2025

• The big data analysis of airline listed companies' brand reputation for May 2025 shows that Korean Air ranks first, Hanjin Kal second, and Asiana Airlines third.
• The Korea Corporate Reputation Research Institute analyzed 41,885,106 pieces of big data from April 12 to May 12, 2025, noting a 7.26% decrease compared to 45,162,695 pieces from the previous month.
• The rankings for airline listed companies' brand reputation in May 2025 are: Korean Air, Hanjin Kal, Asiana Airlines, Jin Air, T'way Air, Jeju Air, and Air Busan.
• Korean Air, which ranked first, has a participation index of 990,462, media index of 448,739, communication index of 968,826, community index of 2,499,912, market index of 14,014,243, and social contribution index of 298,712, resulting in a total brand reputation index of 19,220,894. This is a 7.72% decrease from April's index of 20,828,984.
• Hanjin Kal, in second place, has a participation index of 9,094, media index of 15,174, communication index of 19,784, community index of 28,114, market index of 10,002,588, and social contribution index of 48,821, leading to a brand reputation index of 10,123,576. This is a 3.80% decrease from April's index of 10,523,169.
• Asiana Airlines, in third place, has a participation index of 516,645, media index of 199,779, communication index of 524,896, community index of 351,987, market index of 3,675,246, and social contribution index of 294,455, resulting in a brand reputation index of 5,563,008. This is an 8.51% decrease from April's index of 6,080,722.
• Jin Air, ranked fourth, has a participation index of 461,562, media index of 146,754, communication index of 297,931, community index of 271,937, market index of 876,111, and social contribution index of 162,743, leading to a brand reputation index of 2,217,038. This is a 7.64% increase from April's index of 2,059,760.
• T'way Air, in fifth place, has a participation index of 363,909, media index of 129,884, communication index of 194,996, community index of 263,486, market index of 831,739, and social contribution index of 143,901, resulting in a brand reputation index of 1,927,916. This is a 14.42% decrease from April's index of 2,252,644.

3) Simple Investment or Management Participation? - Hoban Construction Increases Stake in Hanjin Kal to 18.46%

• Hoban Construction has raised its stake in Hanjin Kal, the holding company of Korean Air, to over 18%.
• While Hoban Construction claims it purchased the shares solely for investment purposes, industry insiders are paying attention to the possibility of Hoban seeking management participation in the future.
• Hoban Hotel & Resort, a subsidiary of Hoban Construction, acquired 641,974 shares (0.96%) of Hanjin Kal in the market over the past year, from March of last year to April of this year. Additionally, Hoban purchased 34,000 shares (0.05%) last March.
• As a result, the stakes of Hoban Hotel & Resort and Hoban Construction in Hanjin Kal have increased to 6.81% and 0.15%, respectively. Consequently, the combined stake of Hoban Construction and its affiliates is now 18.46%. Hoban Construction already holds an 11.50% stake in Hanjin Kal, having acquired shares from the private equity fund KCGI, which had been in a management dispute with Hanjin Kal, making Hoban the second-largest shareholder.
• Furthermore, in 2023, Hoban Construction purchased an additional 5.85% stake in Hanjin Kal from Pan Ocean, narrowing the gap with the largest shareholder, Hanjin Group Chairman Cho Won-tae. Chairman Cho and related parties hold 30.71% of Hanjin Kal, with 10.58% of that held by the Korea Development Bank.
• Hoban Construction also voted against a resolution at the recent Hanjin Kal shareholder meeting to increase the director compensation limit from 9 billion won to 12 billion won. Given that Hoban had previously explored acquiring Kumho Industrial, the parent company of Asiana Airlines in 2015, there are discussions about its potential entry into the aviation industry.

4) US-China Tariff Agreement: Limited Surge in Transportation Demand - Long-Term Uncertainty Remains Due to High Tariffs

• Following the agreement between the US and China to suspend mutual tariffs for 90 days, expectations for a temporary increase in logistics demand have risen. However, experts in the shipping and air cargo industries are cautiously predicting that "the surge in demand will be limited."
• Hapag-Lloyd reported a significant increase in cargo bookings from China to the US following the announcement of the preliminary tariff agreement, with this week's bookings up over 50% compared to last week. This spike is attributed not only to the tariff reduction but also to a backlog of shipments in China being released all at once.
• However, it is uncertain whether this surge in demand will last for 60 to 90 days or be short-lived. Future negotiations between the US and China could significantly impact shipping volumes.
• After the tariff negotiations were announced, some expressed optimism. Particularly, given that the average transit time for the China-US route is 22 days, the market has discussed the potential for short-term increases in sea and air freight rates. Traditionally, the third quarter is a peak season for shipping, and with early shipments for inventory securing, this year's peak season might arrive earlier.
• Market analysis firm Freightos noted that "the 30% level of tariff relief is higher than during the first Trump administration." According to the National Retail Federation (NRF), despite tariffs exceeding 20% in March, US importers pushed to secure early shipments in anticipation of tariff increases, resulting in a year-over-year increase of 11% in import volumes for March and April.
• In conclusion, while some short-term demand rebound is expected, many point out that the long-term uncertainty in US-China trade policy hinders the structural recovery of the transportation market.

5) GSA and Airline Trends

• T'way Air will operate four weekly flights from Incheon to Vancouver. Starting July 12, the Incheon-Canada Vancouver (VR) route will operate four times a week (Tuesdays, Thursdays, Saturdays, and Sundays). This marks the first Canadian route for a domestic low-cost airline (LCC). The aircraft used will be the A330-300.

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