News / Korean Air rides ecommerce boom, but warns of soft Asia-bound

Korean Air has expanded cargo lift without deploying additional freighters, thanks to surging ecommerce volumes and AI-related demand, focusing on maximising the utilisation of its fleet of 23 freighters.

The airline told The Loadstar ACTKs were up more than 10% on pre-pandemic 2019 levels, driven by extra sections and charters on high-demand transpacific routes.

“We are offering customised capacity, including charters and extra flights, on major high-demand routes such as the Americas, to align with customer needs,” said Jae Dong Eum, EVP and head of the cargo business division at Korean Air.

While transpacific outbound capacity has steadily increased to support the surge in ecommerce demand, inbound (backhaul) demand to Asia has been relatively soft, impacted by supply chain restructuring by US enterprises and volatile tariff policies.

Demand on the Europe-Asia trade route has weakened due to downturns in key industrial sectors, namely automotive, machinery, and chemicals, alongside reduced factory utilisation and the pressure of a strong exchange rate, according to Mr Eum.

“Furthermore, intensified carrier competition has dampened growth in this region,” he added.

In response, Mr Eum said, Korean Air was leveraging specialised operational capabilities to target high-value, time-critical cargo, including semiconductor equipment, IT infrastructure, fresh perishables, and cold chain pharmaceuticals.

Regionally, Korean Air has identified Vietnam as a key route for cargo. The airline’s cargo operations in Hanoi and Ho Chi Minh City handle significant tonnage of those high-value exports. Reportedly, Hanoi serves as the airline’s biggest freighter hub in South-east Asia, operating 11 weekly flights, moving some 50,000 tons of export cargo in 2024.

On major tradelanes to the Americas and Europe, the combination of persistent demand and market uncertainty created downside rate rigidity earlier this year.

“Since the second half, however, we have observed a sustained upward trend,” Mr Eum noted, and attributed the trend to traditional peak season cyclicality and transient market volatility. He said large shippers were accelerating shipments through front-loading tactics to reduce their vulnerability to recurring changes in US tariff policies.

Although Asia-bound tradelanes have traditionally shown less volatility, volumes are rising, fuelled by steady demand in high-value sectors, like semiconductor equipment and AI-driven servers, and by the rapid restructuring of manufacturing supply chains across the region. Consequently, Korean Air expects rates to maintain a stable upward trajectory.

In the short term, Korean Air is refraining from expanding freighter capacity during the peak season. To prepare for the year-end surge, the carrier devised a strategy aimed at optimising efficiency and maximising the use of its assets. Mr Eum emphasised the need to enhance coordination between the long-haul trunk services and regional feeder networks.

“This integration allows us to respond flexibly and in a timely manner to external variables, such as trade disputes, while reflecting recent market trends, particularly the demand for ecommerce and AI-related logistics; and include these directly into our capacity strategy,” he explained.

Jae Dong Eum

Looking, ahead, Korean Air Cargo is set to receive A350 freighters, after converting seven of its A350-1000 passenger aircraft orders.

Meanwhile, ecommerce has grown rapidly in recent years, driven largely by the global expansion of Chinese B2C platforms requiring expedited delivery. Mr Eum commented: “South Korea has effectively leveraged its geographical proximity to China to serve this need.”

By leveraging its geographic positioning with schedule reliability, Mr Eum said Korean Air had effectively captured incremental volumes of Chinese-origin ecommerce destined for the Americas and Europe through multimodal sea and air transhipment solutions.

At the same time, exports of ‘K-Culture’ products, ranging from K-pop merchandise to K-beauty devices and cosmetics, are showing a sharp upward trend. He added: “Ecommerce demand is contributing to yield improvements not only on intercontinental routes but also across our intra-Asia network.”

Perhaps the most consequential event at the airline is the recent sale of Asiana’s cargo division to Air Incheon (now rebranded as AirZeta), a key condition of the Korean Air-Asiana merger.  While the transaction will have an impact on the regional market, Mr Eum reckons the fundamental competitive landscape will remain largely consistent.

“We are closely monitoring how the industry dynamics will shift with the arrival of a new cargo carrier, and welcome the move toward a healthy and competitive environment,” he said.