Korean Air mulls 30-strong Boeing jet order as early as July

Korean Air Lines Co., a big buyer of Boeing Co. aircraft, is planning to order up to 30 new jets from the US planemaker as soon as next month.

Fresh from ordering almost three dozen rival Airbus SE jets, the Seoul-based carrier is now deciding between Boeing’s 787 Dreamliner and additional A350s, Korean Air’s Chairman and Chief Executive Officer Cho Won-Tae said in an exclusive interview with Bloomberg on Sunday in Dubai.

The choice will probably be made at the Farnborough Airshow, which kicks off in late July in the UK, and the decision is “more likely” to be the 787, Cho said.

Any order would strengthen the beleaguered US planemaker, which has been beset by safety lapses and questions over quality controls in its manufacturing processes.

“Boeing is a strong company,” Cho said. “I believe in Boeing management. They will pull through. It might take some time.”

Korean Air has been on a jet buying spree of late to replace a lot of older aircraft.

The carrier in March ordered 33 A350s and last year added 20 A321neos to bring its total backlog to 50 of the single-aisle jets. Along with Boeing planes, Korean Air has more than 140 new aircraft for renewal and expansion.

The airline is also planning to order new freighters and is looking at Boeing’s 777X for that. 

Efforts to consolidate the number of aircraft types ahead of Korean Air’s merger with Asiana Airlines Inc. means Cho won’t consider the 777X “easily.” However, if the airline opts for Boeing’s yet-to-be certified jet for cargo, it would also order the passenger variant, he added.

Asiana Merger

Korean Air expects full approval from the US government by the end of October to merge with rival Asiana. Cho said he didn’t believe further concessions would be required beyond the divestiture of Asiana’s cargo unit and several long-haul passenger destinations.

“We have done everything the US and the EU has questioned us to do,” Cho said.

The US is the last of 14 jurisdictions to respond to Korean Air’s more than three year effort to secure approval from competition authorities.

Beyond orders for the carrier’s main airline brand, Korean Air is also weighing prospects for the merger of three low-cost carriers, including its subsidary Jin Air. The aim is to merge Jin Air with Asiana’s Air Busan and Air Seoul, giving that entity a combined fleet of 64 aircraft. 

Cho is planning “pretty significant growth” to enlarge Korean Air’s fleet size to up to 100 planes in five years.

Korean Air’s passenger traffic is currently running at about 90% of pre-Covid levels. Korean Air’s financial performance is better than it was before the pandemic, bolstered by brisk business at its air cargo unit.

Cho said he’s confident high levels of profitability will remain despite wider industry concerns about waning demand.