Korean Air Lines Co., a significant purchaser of Boeing Co. aircraft, is poised to order up to 30 new jets from the US manufacturer as soon as next month, according to reports.
The Seoul-based airline is weighing options between Boeing’s 787 Dreamliner and additional Airbus A350s, with a decision likely to be made at the Farnborough Airshow in late July. Chairman and Chief Executive Officer Cho Won-Tae indicated that the decision is “more likely” to favor the 787.
This potential order would be a boost for Boeing, which has faced challenges with safety and quality control issues. Despite these setbacks, Cho expressed confidence in the company, stating, “Boeing is a strong company. I believe in Boeing management. They will pull through. It might take some time.”
Korean Air has been actively renewing its fleet, having ordered 33 A350s in March and adding 20 A321neos last year. The airline now has over 140 new aircraft on order, including both Boeing and Airbus models.
Additionally, Korean Air is exploring options for new freighters, considering Boeing’s 777X. However, Cho noted that due to efforts to streamline aircraft types ahead of the airline’s merger with Asiana Airlines Inc., the 777X would not be considered lightly. Should they choose the 777X for cargo, the passenger variant would also be included in the order.
Asiana Merger Progress
The merger with Asiana is anticipated to receive full approval from the US government by the end of October. Cho mentioned that no further concessions are expected beyond the divestiture of Asiana’s cargo unit and certain long-haul routes. “We have done everything the US and the EU has questioned us to do,” he remarked. The US is the final jurisdiction among 14 to respond to Korean Air’s prolonged effort to gain approval from competition authorities.
Beyond the main airline brand, Korean Air is evaluating the merger of three low-cost carriers, including its subsidiary Jin Air, with Asiana’s Air Busan and Air Seoul. This merger aims to create a combined fleet of 64 aircraft, with plans for “pretty significant growth” to increase Korean Air’s fleet size to 100 planes within five years.
Korean Air’s passenger traffic has rebounded to about 90% of pre-COVID levels, with its financial performance surpassing pre-pandemic metrics, driven by strong air cargo business. Cho remains optimistic about maintaining high profitability despite broader industry concerns over declining demand.