Boeing is close to finalizing a deal with Korean Air for the sale of around two dozen 777X jets. This potential agreement, valued between $4 billion and $6 billion, could be sealed as early as the Farnborough Airshow in July, according to industry sources.
Korean Air, South Korea’s largest carrier, has been engaged in discussions with Boeing for several months. This follows their unexpected order of 33 A350 jets from Airbus in March. The new potential order with Boeing may involve between 20 to 30 of the 777X aircraft. Each of these jets is valued at approximately $198 million after standard market discounts, based on estimated delivery prices from Cirium Ascend.
An airline spokesperson mentioned, “We are discussing with manufacturers but nothing has been confirmed yet.” Boeing has chosen not to comment on the commercial discussions, directing any queries to Korean Air.
Strategic Fleet Review
The potential order comes amidst Korean Air’s plans to acquire nearly two-thirds of its smaller domestic rival, Asiana Airlines, for about $1.4 billion. The European Union approved this merger in February, and Korean Air anticipates U.S. approval by the end of October. This merger will significantly strengthen Korean Air’s market position.
After the Airbus deal, Reuters reported in April that Korean Air was considering a new Boeing order centered on the 777X, an upgrade of the 777 mini-jumbo. In June, Korean Air Chairman Walter Cho told Bloomberg News that the airline was weighing options between the smaller Boeing 787 or more A350s. Since then, industry sources indicate that discussions have primarily focused on the 777X.
The Boeing 777X is the largest twin-engine jet in the industry, capable of seating around 400 passengers. However, its entry into service has been delayed by five years due to certification and other issues. Despite these delays, an order from Korean Air would be a significant boost for Boeing, which has been facing a series of corporate challenges.
Boeing’s 777X has faced multiple setbacks, but securing an order from Korean Air could help restore confidence in the program. The aircraft’s advanced design and efficiency make it an attractive option for airlines looking to expand their long-haul capabilities.
Market Impact
The Farnborough Airshow, scheduled from July 22 to 26, is a major event for the aerospace industry. While industry analysts do not expect a large number of orders this year, the potential deal with Korean Air could be a highlight. It would also underscore Boeing’s resilience and ability to compete in a market where Airbus has recently made significant inroads.
Korean Air’s consideration of the 777X aligns with its strategy to enhance its fleet with more efficient and capable aircraft. The airline’s decision will also influence other carriers that are currently evaluating their fleet renewal plans.
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