In 2025, Korea's industrial sectors saw mixed fortunes. Automobiles and petrochemicals struggled due to the U.S. imposing high tariffs and the fallout from the Russia-Ukraine war, while sectors such as shipbuilding and defense enjoyed a boom as global demand rose. We examine the key issues that will drive the global economy in 2026 and forecast their impact by sector. [Editor's note]
A major shake-up is expected in Korea's airline industry this year. With the integrated airline of Korean Air and Asiana Airlines launching at the end of the year, a carrier ranked in the global top 10 will be born. In the process, attention is expected to focus on route allocation and a mileage integration plan. Domestic airlines must respond to expense risks such as exchange rates, oil prices and labor costs.
In the shipping industry, the acquisition and transfer plan for HMM, Korea's only global shipping line, is expected to be the biggest issue. The Ministry of Oceans and Fisheries is set to release this month the transfer plan for HMM and its affiliated organizations. In the global shipping market, oversupply and geopolitical risks are also expected to come to the fore.
◇ Integrated Korean-Asiana airline to launch… expense burden likely to rise with strong dollar
According to the airline industry on the 14th, the process for Korean Air to acquire Asiana Airlines began in Nov. 2020. After being incorporated as a subsidiary at the end of 2024, the companies entered the practical integration phase last year. The integrated airline combining the No. 1 and No. 2 players in the domestic market is scheduled to launch in Dec.
To that end, Asiana Airlines on the 14th will move from the existing Incheon International Airport Terminal 1 (T1) to Terminal 2 (T2). Currently, 12 airlines, including JIN AIR, AIR SEOUL and AIR BUSAN, which are affiliated with Korean Air, are using T2.
Ahead of the integrated airline's launch, Korean Air is putting effort into creating a "members-only lounge." Timed with Asiana Airlines' T2 transfer, it plans to open a Prestige Lounge on the east side (left) of T2. By Apr., it aims to complete both the first-class lounge and the expansion of the west-side Prestige Lounge. As it expands the lounges, Korean Air will also introduce premium services. It will run a live kitchen to enhance the variety and freshness of food, and will make cocktails, wine and beverages on the spot.
Airlines have recently been rolling out premium seats as a middle tier between the costly business class and the cramped economy class. Air Premia's "premium economy (wide premium)" and Parata Air's "business smart class" are representative examples. Korean Air has introduced a "premium class," a middle tier between Prestige and economy, on short-haul routes such as Japan and Southeast Asia, and plans to expand its application this year.
An airline official said, "The economy is in a downturn, but customer demand for 'premium' seats is increasing," adding, "Customers are increasingly seeking comfort even if they pay more expense, so changes in the industry are likely to continue."
Route allocation to prevent the integrated airline from monopolizing the market is expected to draw industry attention. In Dec. 2024, during the corporations merger process of Korean Air and Asiana Airlines, the Korea Fair Trade Commission ordered that the traffic rights and slots on 34 routes where monopolies could arise be transferred to other airlines within 10 years.
Of these, the transfer of six routes was completed last year, and the transfer procedures for 18 routes are scheduled to proceed sequentially from the first half of this year. Airlines have not yet applied for the remaining 10 routes. The "mileage integration plan," the final hurdle for the merger, received two supplementation orders from the Korea Fair Trade Commission (FTC) last year, and Korean Air plans to prepare supplementary measures within this year.
By business institutional sector, passenger and cargo demand outlooks are diverging. For passengers, international routes recovered to pre-COVID levels last year, centered on Japan and Southeast Asia, while domestic routes are expected to struggle to grow this year as well. Demand for international air cargo is forecast at 106% of 2019 levels.
Baek Seung-han, associate research fellow at The Korea Transport Institute (KOTI), said, "The growth level of international passengers this year is expected to differ by route and region," adding, "Domestic passenger demand is expected to reach only 93% compared with pre-COVID-19."
Experts expect the global airline market to boom this year, but they note that domestic airlines must prepare for risks related to various expenses such as exchange rates and oil prices.
According to the International Air Transport Association (IATA), the total projected net profit of global airlines this year is $41 billion (about 60 trillion won), which would be a record high. However, the won-dollar exchange rate is likely to remain in the 1,400–1,500 won range this year, which is expected to increase expense burdens for domestic airlines. This is because fuel, lease fees and maintenance costs are largely settled in dollars.
Choi Min-gi, a researcher at Shinhan Investment & Securities, said, "Jet fuel for aircraft is paid for in dollars, so expense burdens will increase as the exchange rate rises," adding, "Fares are also highly likely to fall as competition intensifies with low-cost carriers (LCCs) and foreign airlines."
◇ HMM transfer plan to be announced this month… outlook dims with Suez Canal traffic resumption
One of the biggest issues in Korea's shipping industry this year is whether HMM will transfer to Busan and whether it will be resold. HMM's transfer to Busan was a presidential campaign pledge by Lee Jae-myung and is being pushed as a key government task. The HMM transfer plan began to pick up speed with the justification of pioneering the Northern Sea Route, coupled with a national land balance development goal to bring all ocean and fisheries functions to the southeastern region and overcome the capital-area-centered system.
The competent authority, the Ministry of Oceans and Fisheries, decided to postpone the announcement of the transfer plan for HMM, its affiliated organizations, the maritime court and the Southeast Investment Corporation, which had been scheduled for the second week of this month. The minister's post is vacant, and opposition from the HMM union is strong. The Ministry of Oceans and Fisheries (MOF) began its transfer to the Busan government building on Dec. 8 last year and held an opening ceremony on the 23rd.
The delay came as negotiations with the Nationwide Service Industry Labor Union HMM chapter (HMM union) progressed slowly. Chun Jae-soo, former Minister of Oceans and Fisheries, met directly with the HMM union late last year to persuade them of the necessity of the Busan transfer, but the union strongly resisted, saying, "If the Busan transfer is forced through, we will not rule out a general strike." On the 4th of last month, the union also held a press conference to "condemn the forced transfer of headquarters."
Attention is also on whether the resale of HMM will gain speed. Korea Development Bank (KDB), the largest shareholder (35.42% equity), began reassessing the value of its HMM equity at the end of last year. HMM's current market capitalization is around 20 trillion won, and the combined equity stakes of KDB and the Korea Ocean Business Corporation (35.08%) amount to about 13 trillion won. Even if only KDB's equity is sold separately, the stake is estimated to be worth about 6.7 trillion won.
Industry analysts estimate that, considering a control premium, the acquisition price will be in the 7–8 trillion won range. KDB is said to plan to quickly select an executing institution (such as an accounting firm) through a limited competitive bid and receive a final report by the end of Feb. this year.
POSCO Group and Dongwon Group are interested in acquiring HMM. POSCO Group already began a feasibility analysis in Sept. last year, and Dongwon, which fell short in the 2023 acquisition race, launched an internal task force (TF) to make another attempt. POSCO points to synergy between steel and shipping, while Dongwon emphasizes links between fisheries, logistics and shipping. Both aim for business diversification, lower logistics costs and stabilized raw material transport.
Many assess that POSCO is far ahead of Dongwon in terms of cash mobilization power. As of the end of Sept. last year, POSCO Holdings' cash-equivalent assets exceeded 7 trillion won, whereas Dongwon Industries has less than 500 billion won.
Many expect the global shipping market to be sluggish this year. That is because global vessel oversupply and the impact of U.S. tariffs are pushing down ocean freight rates. According to the "Annual Shipping Market Report" released late last year by the Korea Ocean Business Corporation (KOBC), container freight rates, based on the Shanghai Containerized Freight Index (SCFI), stood at 1,580 on Dec. 19 last year, down 38% from 2,505 at the start of the year.
This year's forecast for growth rate in slot supply is 3.5%, outpacing demand at 2.1%. This means the amount of slot capacity (the total cargo a ship can carry) exceeds cargo volume. By 2028, cargo volume is expected to increase 12.9% compared with 2024, while slot capacity growth is projected at 26.3%.
If Suez Canal traffic resumes this year, ocean freight rates could fall further. The Suez Canal connects the Mediterranean, the Red Sea and the Indian Ocean, dramatically shortening the route compared with going around the Cape of Good Hope at the southern tip of Africa.
After the Israel-Hamas war (Gaza war) broke out in Oct. 2023, traffic through the Suez Canal was suspended until Oct. last year. However, trial sailings have recently been underway, including a mega container ship operated by French carrier CMA CGM transiting the canal in Nov. last year. Carriers have said they will resume using the Suez Canal this year.
If ships that had been going around the Cape of Good Hope return to using the direct Suez Canal route, the volume that can be carried per day increases by that much. In that case, ship supply rises and ocean freight rates inevitably fall further. Drewry, a global shipping consultancy, projected that rates on major routes will fall 17% this year from last year. Financial data provider FnGuide put HMM's operating profit forecast for this year at 863.2 billion won, down 38.2% year over year.
Kim Young-ho, a researcher at Samsung Securities, said, "The container freight index has already begun to adjust, and supply is increasing as newly built vessels are delivered," adding, "With the resumption of Suez Canal traffic, the downward pressure on ocean freight rates will intensify."