Korean Air has agreed to purchase 103 Boeing jets as part of a $50 billion plan to modernise its fleet and integrate itself with recently acquired subsidiary Asiana Airlines.
The deal includes commitments by Korean to purchase 50 737 Max 10s, eight 777-8 Freighters, 20 777-9s and 25 787-10s, Boeing said on 25 August.
The company disclosed the deal shortly after US President Donald Trump met at the White House with South Korean president Lee Jae Myung, also on 25 August.
The agreement, if converted in its entirety to firm orders, would be Korean’s “largest-ever order and Boeing’s largest widebody order from an Asian carrier”, Boeing says.
“Acquiring these next-generation aircraft is the core of our fleet-modernisation strategy, delivering significant gains in fuel efficiency and enhancing the passenger experience across our global network,” says Korean chief executive Walter Cho. “This investment is also a critical enabler for our future as a merged airline with Asiana, to ensure that our combined carrier is one of the most-competitive airlines in the industry.”
US secretary of commerce Howard Lutnick and South Korean minister of trade, industry and energy Kim Jung-kwan were on hand when Boeing and Korean signed the deal.
“We are honoured to strengthen our partnership with Korean Air through this landmark agreement, which reflects the value and capabilities of Boeing’s market-leading airplane family,” says Boeing Commercial Airplanes CEO Stephanie Pope.
Boeing’s 737 Max 10, 777-8 Freighter and 777-9 are not yet certificated.
Korean Air already operates a sizeable Boeing fleet that includes 23 737s, 16 747s, 41 777s and 28 787s, according to fleet data provider Cirium. It also holds outstanding orders for seven 737 Max 8s, 12 Max 10s, 20 777-9s and 36 787s.
Korean also operates Airbus A321s, A330s, A350s and A380s, and holds outstanding orders for another 40 A321neos and 31 A350s, Cirium data shows.
Asiana, which Korean acquired late last year, also operates A321s, A330s, A350s, A380s, and eight 777-200ERs. It also has unfilled orders for more A321neos and for A350s.
The deal also sees Korean acquire 19 spare engines – eight from CFM International and 11 from GE Aerospace – worth around $690 million, and a 20-year engine MRO contract with GE covering 28 aircraft.
Korean has in recent months undergone a rebranding effort and a push to attract more premium customers, with more in-flight offerings, including new catering options for premium classes, as well as new airport lounges and in-flight amenity kits.
On its most recent earnings call, the SkyTeam carrier said premium travel demand was particularly strong on flights to North America, Europe and Southeast Asia.
Story updated with additional information about engine, MRO contracts.
