Korean Air Opts for Airbus Over Boeing in a $14 Billion Fleet Expansion Deal
Korean Air Lines, traditionally reliant on Boeing for its aircraft supply, has made a significant pivot by securing a deal with Airbus for 33 A350 wide-body jets, valued at $14 billion. This strategic move is aimed at enhancing the airline’s fleet efficiency as it gears up for a merger with Asiana Airlines.
In this ambitious order, Korean Air will acquire 27 of Airbus’s flagship twin-aisle A350-1000 jets, alongside six A350-900s, bypassing Boeing’s pending 777X for the sought-after Airbus models. This development follows anticipation of Korean Air’s substantial investment in at least 20 A350 aircraft.
Korean Air’s investment in next-generation, eco-friendly Airbus A350 aircraft demonstrates the airline’s strong commitment to sustainability and its strategic preparation for the upcoming merger with Asiana Airlines, aligning perfectly with its green initiatives and future growth plans.
The imminent merger promises to significantly bolster Korean Air’s operational capabilities by integrating Asiana Airlines’ comprehensive Airbus fleet into its operations. This includes the advanced A350 models and a robust order backlog of Airbus A321neo jets, signaling a major upgrade in both the scale and efficiency of Korean Air’s fleet.
Furthermore, Airbus celebrated another victory with Japan Airlines’ order of 42 jets, contrasting with Boeing’s smaller win of 10 787-9s.
The surge in wide-body aircraft orders reflects a positive outlook on travel growth and the industry’s challenges in meeting the demand for single-aisle planes. Korean Air’s fleet optimization and cost-reduction efforts are in preparation for its merger with Asiana, awaiting regulatory consent in the US.
As of the end of December, Korean Air’s fleet included nearly 160 aircraft, with about 100 more on order. The airline is also considering discontinuing its 10 Airbus A220s, the smallest in its fleet.
Korean Air’s Current Widebody Fleet
23 Airbus A330, average age: 18.1 years, oldest: 18 A330-300s (19.3 years)
44 Boeing 777, average age: 12.3 years, oldest: 8 777-200ER (18.8 years) and 4 777-300 (24.8 years)
This order marks a significant achievement for Airbus, introducing its A350-1000 jet to its 10th new operator within a year, including Delta Air Lines, which holds a significant stake in Korean Air’s parent company, Hanjin KAL Corp. The series of agreements not only boosts Airbus but also compensates for the impact of stringent pricing by engine manufacturer Rolls-Royce Holdings Plc on some wide-body campaigns.
Meanwhile, Boeing continues to navigate increased safety scrutiny of its aircraft following several recent incidents, highlighting the competitive dynamics and shifting preferences within the aviation industry.
This strategic decision underscores Korean Air’s commitment to modernizing its fleet with more efficient and newer aircraft models, positioning itself for competitive advantage and operational efficiency in the post-merger landscape.
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Sources: AirGuide Business airguide.info, bing.com, Bloomberg.com, fortune.com