Korean Air has finalized a purchase agreement for 25 Boeing aircraft with a value of approximately US$5.5 billion at list prices. The transaction is the biggest aircraft order in Korea’s aviation history.
The purchase forms a key component in Korean Air’s strategy of global expansion. The airline aims to maintain its title as the world’s number one commercial cargo carrier, which it has been retaining in the past two years, and to become one of the world’s top 10 passenger carriers by 2010.
According to the purchase agreement, Korean Air will buy from Boeing ten 777-300ERs, five 737-900/700, five 747-8 Freighters and five 777-200 Freighters, along with options for eight additional aircrafts - four 777-300ERs, two 747-8Fs and two 737-900ERs. Delivery of the aircrafts is scheduled for 2009 to 2019.
The 777-300ERs will replace the 747-400 passenger aircrafts that Korean Air is currently converting to freighters while the 747-8 Freighters and 777-200 Freighters will further expand Korean Air’s cargo capacity and operational efficiency. The 737-900ERs will provide additional capability for passenger routes to neighboring countries.
The world’s passenger and cargo markets are expected to grow at an annual rate of 5-6% in the next 20 years. Korean Air believes that the purchase order will equip the company to capture the business opportunities by enlarging its capacity to meet the increasing demand following China’s liberalization of the aviation market. It will also enhance the carrier’s operation efficiency through modernization of the fleet and reduction in fuel and operational costs.
Chairman and CEO of Korean Air Mr. Yang Ho Cho said, “The addition of Boeing’s aircraft to our fleet will play an integral part in our development to become a leader in the world’s aviation industry. It will also enable us to provide our customers with the highest level of service in line with international standards.”