AI infrastructure boom boosts air freight demand, several Asian airlines unexpectedly "win big": cargo revenue reaches a three-year high.

Asian airlines have become the latest beneficiaries of the growing demand for artificial intelligence (AI) servers and computing power chips, which unexpected good news is helping to mitigate the impact of soaring aviation fuel costs. The latest quarterly reports show that Korean Air, China Airlines, and EVA Air have reached their highest levels of freight revenue in over three years. These airlines say that the transportation of semiconductors and other equipment has driven growth in a new round of freight demand. Korean Air and China Airlines saw their freight revenue reach the largest quarterly increase since 2022, when the COVID-19 pandemic pushed up transportation costs and pushed freight revenue to new highs. Nathan Gee, head of transportation research for the Asia-Pacific region at Bank of America, said: "Freight has always been a major bright spot for Asia-Pacific airlines." He added, "We are optimistic about the fundamentals of air freight in 2027." He noted that the recent rise of the AI supercycle, robust e-commerce flows, and tightening supplies all "support strong pricing power." The global AI data center and other infrastructure construction boom has driven a sharp increase in freight demand. Other industries benefiting from the AI boom include engineering equipment, general energy storage batteries, and generator and turbine equipment manufacturers. Chinese airlines in Taiwan and Korea have dedicated freighter fleets, putting them in a favorable position. SK Hynix and Samsung Electronics in Korea are among the world's major AI chip manufacturers, while TSMC is a key foundry for NVIDIA. According to the TAC Index, airfares on major air routes from key regions such as Hong Kong, Seoul, and Taiwan to the United States have risen to their highest level since 2022 in recent weeks. Earlier this week, Korean Air reported operating profit that exceeded analysts' expectations by more than four times. The company attributed the nearly 50% surge in freight revenue to investments in the global AI field and said it would continue to increase its investment in high-growth freight sectors such as AI-related industries. Earlier this year, the unsettled situation in the Middle East led to a surge in aviation fuel prices, while the growth in AI chip shipments helped alleviate cost pressures on airlines. EVA Air said on Tuesday that AI server-related cargo accounted for 40% to 50% of all air freight from Taiwan to the US, without specifying a timeframe. To meet market demand, the company plans to purchase three more freighters by 2028. In terms of fleet size, several Asian passenger airlines are also leading global cargo operators. With the surging demand for AI-related cargo transport, freighter orders are also surging. Last month, China Southern Airlines' fully owned subsidiary, Southern Air Cargo, ordered up to 10 Boeing 777 freighters. Cathay Pacific Cargo added two Airbus A350F freighters, and China International Cargo Airlines added four A350F freighters in May, bringing its total order for this model to 10. However, large aircraft manufacturers such as Boeing are facing many obstacles in expanding production, including shortages of components and labor caused by the pandemic. Bank of America believes that AI-related goods have begun to displace other goods in the transportation industry in the Asia-Pacific region. Gee said that this allows airline freight operations to fully offset the impact of rising aviation fuel costs, a feat that passenger flight operations cannot achieve. As more airlines release their financial reports in the coming weeks, investors will have a clearer understanding of the ripple effects of the AI boom on air freight demand.