EXTRANS GLOBAL - Air Freight News - Week 50

1. Air Cargo General

• IATA warns of a global economic slowdown despite sustained year-end air cargo growth trend.
• IATA forecasts continued growth until year-end, but cautions about potential global economic slowdown thereafter.
• In October, global air cargo performance reported a 3-month consecutive year-on-year growth, according to the International Air Transport Association (IATA). However, uncertainties surround the sustainability of this upward trend.
• In October, global air cargo demand (1 km basis, including domestic routes) increased by 3.8% compared to the previous year. With the recovery of passenger belly cargo supply due to the return of passenger flights, overall cargo supply increased by 13.1%. As a result, the overall load factor for October decreased by 4% to 45.2% compared to the previous year.
• While IATA acknowledges the steady growth in cargo demand as positive, it remains cautious due to lingering uncertainties in the market. Overall cargo demand has not yet surpassed the pre-COVID-19 levels of 2019, and the possibility of a negative turn in global economic activity in October is highlighted.
• Positive indicators such as demand recovery, increased profitability, and trade growth are observed. However, demand is still 2.4% lower than pre-pandemic levels, and global economic uncertainty persists.

2. Possibility of Active Pursuit of Air Busan's Separation Sale with the Support of the Government (?)

• The ruling party discusses central support for the separation sale of Air Busan, a subsidiary of Asiana Airlines.
• The ruling party visits various institutions in Busan to discuss concrete collaboration plans to normalize Air Busan, which faced difficulties due to the prolonged merger of Korean Air and Asiana Airlines.
• The ruling party emphasizes the importance of Air Busan as a representative airline in the region and points out challenges it faces due to the integration issues between Asiana and Korean Air. The party highlights the significance of Air Busan's survival and development for the national interest, especially in light of the failure to attract the 2030 Busan Expo.
• The ruling party plans to discuss the issue of Air Busan's separation sale in the upcoming party's highest council meeting. They express intentions to formally propose the matter to the party's policy committee, considering the disappointment in the region due to the failure of the 2030 Busan Expo.

3. LCCs Focusing on Fleet Expansion (Air Busan and Air Seoul remain quiet)

• Domestic low-cost carriers (LCCs) plan to expand their fleets in the coming year to maintain the positive momentum in travel demand.
• Despite the merger issues of their parent companies, Air Busan and Air Seoul are uncertain about their aircraft introduction plans.
• Major domestic LCCs plan to continue expanding their fleets next year. T'way Air, which jumped from the third to the second position in terms of passengers and revenue this year, plans to introduce seven new aircraft next year.
• Jeju Air, the top LCC, is also expected to expand its fleet in the future. The specific scale of their fleet expansion is yet to be confirmed.
• Even amid uncertainties, some LCCs, such as Air Premia, plan to add aircraft to their fleets, indicating positive growth prospects.
• However, disparities among LCCs may exist, as some have not finalized their plans for aircraft introduction. Air Busan and Air Seoul, in particular, face challenges in setting specific investment plans due to the merger issues between their parent companies. Currently, Air Busan operates 21 aircraft, and Air Seoul operates 6 aircraft, with the likelihood of maintaining the same scale next year.
• Jin Air, the LCC subsidiary of Korean Air, delays the introduction of two Boeing 737-8 aircraft originally planned for late this year to early next year. Jin Air plans to finalize additional aircraft introduction plans in February or March next year.
• An industry insider notes that the current global backlog of aircraft orders makes it challenging to secure aircraft and that the speed of securing aircraft next year will impact the performance of these carriers.

4. AliExpress - Plans to Establish Logistics Centers in Korea by 2024

• AliExpress is considering establishing logistics centers in Korea to enhance customer satisfaction next year.
• The recent acquisition rumors regarding 11st are denied, with AliExpress emphasizing its focus on providing quality services.
• AliExpress announces the introduction of the 'Project Clean' service and promises to improve customer satisfaction.
• AliExpress Korea CEO, Ray Zhang, expresses the company's commitment to invest 100 billion won over the next three years to strengthen intellectual property and consumer rights.
• AliExpress achieved last year's sales on the first day of Singles' Day in just 33 minutes and 13 seconds this year. The user ratio of women has grown by 386% compared to November last year.
• AliExpress plans to invest 100 billion won over the next three years to prevent the sale of counterfeit products, enhance intellectual property protection for Korean companies, and protect customer rights.
• Currently, 7,600 Korean brands are selling to over 100 million Chinese consumers through Alibaba Group's Taobao, Tmall, etc. About 1,400 Korean small and medium-sized enterprises have signed export contracts through Alibaba.com, expanding their market to Japan, Southeast Asia, Europe, and the Americas through AliExpress, Lazada, etc.

5. UPS - Plans to Build an Automated Sorting Hub at Chek Lap Kok Airport, Hong Kong

• UPS plans to develop a special cargo hub at Hong Kong International Airport to strengthen delivery connectivity in southern China and the Asia-Pacific region.
• Hong Kong Airport decides to lease 215,000 square feet of space to UPS for a fully automated hub.
• The hub is expected to be completed in 2028 and is projected to handle approximately one million tons of cargo annually, utilizing six-sided camera barcode scanners and computer tomography X-ray technology.

6. Airline/GSA Event Update

• WestJet announces the launch of thrice-weekly Calgary (YYC) to Incheon (ICN) flights starting May 17, 2024.
• Lufthansa (LH) introduces regular flights using A321F converted from passenger aircraft.
• Korean Air (KE) expands the use of electronic air waybills (e-AWB) from March 1, 2024, and imposes a fee of KRW 15,000 per waybill for using paper air waybills (MAWB).
• British Airways cargo agent Geodis and Titan Airways initiate a cargo route between Chongqing and London with exclusive lease of 'A330-300' freighter from Titan Airways.

Share this article :