The strong export performance of "K-Beauty" has established itself as a new growth driver for the air cargo market. This is because cosmetics air exports, centered on Europe, surged amid high-value cargo shipments to the Americas being boosted by semiconductors and data center equipment driven by expanded AI (artificial intelligence) investment.
According to ABIANE, a Dutch aviation and logistics strategy consulting firm, beauty and personal care products exported from Korea via air freight from January to August this year totaled 57,000 tons, a 47% increase compared to the same period last year.
In particular, the growth in K-Beauty volumes bound for Europe was notable. Air exports to Europe reached approximately 19,000 tons, more than doubling with a 104% increase from the same period last year. As a result, Europe surpassed the Asia-Pacific region to become the largest air export market for Korean beauty and personal care products.
Volumes bound for North America also grew by 65%, serving as a "second growth axis." While the Asia-Pacific region saw only a 9% increase, volumes to Latin America jumped by 124%. As K-Beauty demand expanded beyond existing Asian markets to the United States, Europe, and Latin America, the regions demanding air cargo also diversified.
This is due to the impact of the European Union (EU) strengthening regulations on low-cost small parcels, which hurt demand for low-cost e-commerce cargo from China. While volumes of low-cost consumer goods heading from China to Europe decreased, Korean-originated air cargo saw its growth items broaden to include K-Beauty in addition to AI and semiconductor equipment.
These changes were also reflected in the performance of Korean Air, Korea's largest air cargo operator. Korean Air cited the expansion of global AI-related investment and strong K-Beauty exports as key factors behind increased air cargo demand in the second quarter. Korean Air's Q2 cargo business revenue was 1.5419 trillion won, a 46.1% increase from the same period last year. Even compared to the 26th% increase in total revenue, the growth rate of the cargo segment was faster. Observers expect the high growth trend in the cargo segment to continue in Q3 results to be announced on the 15th. Sangsangin Securities forecast Korean Air's standalone Q3 revenue to be in the range of 5.1 trillion won. This represents an increase of 28% to 29% from the same period last year. The firm analyzed that operating profit would rise by 30% to 32% to between 490 billion and 500 billion won.
In particular, it estimated that Q3 cargo revenue would increase by around 40% year-on-year to approximately 1.4973 trillion won. It also projected that the cargo yield would be at a level of 682 to 685 won per FTK (freight ton-kilometer, performance of transporting one ton of cargo for one kilometer), which is 38% to 39% higher than in the same period last year.
Global air freight rates are also maintaining high levels. In fact, the global BAI00 (Baltic Air Freight Index) compiled by the TAC Air Freight Index published in Hong Kong recorded a level 24.3% higher than the same period last year as of the 12th. Despite the decrease in e-commerce volumes from China, high-value cargo demand and high fuel costs supported freight rates.
in INDUSTRY
