EXTRANS GLOBAL - Air Freight News - Week 32 2025

Air Cargo General

1. Eastar Jet Sale Rumors - Possibility of Hanwha and Aekyung Acquisition Battle

The possibility of Eastar Jet's sale has surfaced, causing ripples in the domestic industry, with some observers suggesting that Hanwha Group and Aekyung Group may join the acquisition battle.

It is reported that private equity fund (PEF) manager VIG Partners will soon initiate the sale process for Eastar Jet. VIG Partners acquired 100% of Eastar Jet's shares for about 40 billion won in January 2023, and after investing a total of 150 billion won through capital increases and other measures, it pursued financial normalization. As a result of efforts such as expanding aircraft, routes, and entering the cargo transportation business, Eastar Jet's sales increased more than threefold compared to 2022, operating losses significantly decreased, and a turnaround to profitability is expected this year.

Amid Eastar Jet showing gradual improvement, the sale rumors have raised interest in potential acquisition candidates in the industry. In particular, there is speculation that Hanwha Group, often mentioned in airline acquisition rumors, and Aekyung Group, aiming to expand the scale of Jeju Air, will participate in the acquisition battle. First, there is observation that Hanwha Group may show interest in acquiring Eastar Jet to support Kim Dong-sun, the third son of Chairman Kim Seung-yeon and Vice President of Hanwha Galleria and Hanwha Hotels & Resorts. Some point to the case of Daemyung Sono Group acquiring T'way Air and capturing three rabbits—aviation, leisure, and lodging—as a reason why Hanwha Group might also participate in the Eastar Jet acquisition.

Hanwha Group is one of the companies always mentioned as a candidate when an airline is up for sale, though there is still a lack of clear evidence for these claims, but some in the industry do not completely rule out the possibility.

Along with this, Aekyung Group's Jeju Air is mentioned as a strong candidate for acquiring Eastar Jet. Currently, Aekyung Group is pursuing the sale of Aekyung Industry to improve its financial structure and readjust its business portfolio. If Aekyung Group sells Aekyung Industry, it is expected to first resolve the liquidity crisis across the group.

Afterward, the dominant observation is that Aekyung Group will expand its size by acquiring Eastar Jet to grow Jeju Air, its main cash-generating source. In particular, with the merger of Korean Air and Asiana Airlines foreshadowing the integration of their low-cost carrier (LCC) subsidiaries, Jeju Air inevitably needs to expand its scale to secure competitiveness. In this context, analysis suggests that if Eastar Jet comes up for sale, Jeju Air will inevitably eye the acquisition.

2. Changes in the Aviation Industry Brought by 15% U.S.-Korea Tariff

U.S. President Donald Trump has agreed to reduce mutual tariffs from the existing 25% to 15% through a trade agreement with Korea, drawing attention to the overall impact on the aviation industry, with observations that this could bring changes to cargo business and aircraft parts purchase costs.

The aviation industry's revenue structure is being reorganized around passengers. Since COVID-19, passenger demand has expanded, generating a significant portion of airlines' operating profits from passengers. Korean Air's passenger route sales (international and domestic) last year were 9.7786 trillion won, accounting for 60.6% of total sales. Cargo route sales during the same period were 4.4116 trillion won, or 27.4%.

Asiana Airlines' passenger route sales (international and domestic combined) last year were 4.6463 trillion won, accounting for 65.8% of total sales. Cargo route sales during the same period were 1.7195 trillion won, or 24.4%.

This tariff reduction is expected to have a certain positive impact on the cargo business. The existing 25% tariff was cited as a factor increasing export burdens and potentially deepening the decline in cargo volumes. Analysis suggests that easing the tariff could reduce these concerns and lead to some buffering effect on the decline in air cargo transportation volumes.

Full-service carriers (FSC) with a high proportion of cargo transportation via U.S. routes may benefit from the policy change, but low-cost carriers (LCC) that do not operate to the U.S. are interpreted to have limited impact due to their small cargo business scale.

3. Embracing Asiana Cargo and Relaunching as 'Air Zeta'

Air Incheon, the only dedicated cargo airline in Korea, has embraced Asiana Airlines' cargo division and launched as 'Air Zeta' (AIRZETA) under a new name. Air Zeta held an integrated launch ceremony at its Seoul office in Gangseo-gu, Seoul, on the afternoon of the 1st, announcing that it would change its name from Air Incheon to Air Zeta for a fresh start.

The company explained that the name starts with the alphabet A, goes through the last letter Z, and ends with A again, symbolizing the circulation of airports worldwide to transport cargo and take responsibility for global air logistics from beginning to end. The new slogan is 'A New Future for Air Logistics, Beyond Asia to the World.'

With the acquisition of Asiana Airlines' cargo division, the business area has greatly expanded to the Americas, Europe, etc., expressing ambition to grow into a cargo-specialized airline recognized in the global market beyond Asia.

Asiana Airlines also disclosed in its 'Merger Termination Report' on the same day that it had concluded the transaction to sell its cargo business to Air Incheon for a total of 470 billion won. This is about 1 year and 9 months after the cargo business separation and sale was approved by the board in November 2023.

The separation and sale of the cargo business was a mandatory condition required by overseas competition authorities, the European Commission and Japan's Fair Trade Commission, to address concerns about restricting competition in the cargo market while approving the corporate combination with Korean Air.

An Asiana Airlines official stated, "The conclusion of this sale transaction is a meaningful progress in completing key tasks toward an integrated airline," and added, "We plan to focus on the remaining passenger transportation business while accelerating integration work with Korean Air."

Air Zeta has a fleet of 15 cargo aircraft, including 11 medium- to long-haul freighters transferred from Asiana Airlines—10 B747-400F and 1 B767-300F—and 4 existing medium- to short-haul B737-800F.

The plan is to operate on a total of 21 strategic routes with these freighters. In the domestic air cargo market, it leaps to the second-largest air cargo company after Korean Air, which held about 67% market share last year.

The number of employees totals about 1,000, combining over 200 from the existing Air Incheon staff and about 800 transferred from Asiana Airlines' cargo division. Air Zeta plans to focus on expanding its presence in the profitable e-commerce and special cargo markets while building a foundation for growth as a global air cargo hub.

4. New Startup Parata Airlines Introduces First Aircraft - Aims to Expand to North American Routes Following Japan and Southeast Asia

New airline Parata Airlines announced on August 4 that it has introduced its first aircraft and begun full-scale procedures for commercial operations. Parata Airlines held a ceremony to commemorate the introduction of its first aircraft at Gimpo International Airport in Gangseo-gu, Seoul, on the 2nd. The event was attended by Parata Airlines CEO Yoon Cheol-min, Winix Chairman Yoon Hee-jong, and other executives to celebrate the first aircraft introduction. The aircraft introduced this time is an A330-200 model, a medium- to long-haul aircraft capable of flying to North America. Parata Airlines stated that it plans to start short-haul routes to Japan, Southeast Asia, etc., within this year, and expand to long-haul routes starting next year.

In the future, Parata Airlines intends to continue step-by-step preparations for commercial operations, including emergency evacuation training and demonstration flights, in accordance with the Ministry of Land, Infrastructure and Transport's Air Operator's Certificate (AOC) inspection procedures.

Plans have also been established to introduce one more A330-200 and two A320-200 aircraft within this year, securing a total of four aircraft. In his commemorative speech that day, CEO Yoon Cheol-min expressed his ambition, saying, "Based on our top priority value of safety first, we will create differentiated value unique to Parata Airlines with on-time operations and sincere service," and "We will become a new challenger in the aviation market, an airline that makes people anticipate excitement and joy."

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