Korean Air Selects Boeing 747-8 Intercontinental
Almost three years to the day when Lufthansa finalised a deal for up to 40 Boeing 747-8 Intercontinental’s, Korean Air becomes a new customer for the type - and in doing so may have quashed any notion of the passenger jet being culled from the Boeing portfolio.
Earlier this year, Boeing issued a statement declaring that “it is worthy of investment and will be a great airplane for our cargo and passenger customers.”
Korean Air tells me that the deal is valued at around $1.5bn and will complement the airline’s previous order for up to seven 747-8F’s, the first of which is scheduled for delivery a little under two years from now.
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Korean Air plans to deploy the 747-8I’s on routes to Europe as well as North America and says that it will “fill the void between our 300 and 550-seat aircraft in our future fleet.”
Despite the program being pushed into a forward loss position, 747-8 VP and General Manager Mo Yahyavi was particularly upbeat about future prospects for both passenger and freighter models and had even talked up the possibility of increasing production to match anticipated demand.
“My worry is how am I going to be able to respond to that increased rate – when the up-tick cycle comes, everyone wants airplanes, so we’ve got to be ready for that.
We’re constantly talking to customers when they want to talk. But yes, I’m very busy these days,” Yahyavi told me recently.
And it seems his patience has paid off with this new order in the bag once the contract ink has dried.
Korean Air becomes only the second carrier so far that will operate both Airbus A380’s and 747-8I’s. The market for both these large passenger jets is small and continues to contract as the growth in frequencies usurps the need for bigger airplanes.
While the 747-8 is still reeling from cost overruns and technical challenges, its financial position is still much better than that of the bigger A380 - only last month EADS confessed that the airplane was “still a matter of concern” and that both “industrial and financial reviews” would take place to assess the loss-making program that has thus far sapped over $26bn from EADS and taxpayers.
Image courtesy of Boeing
Korean Air appears to have plugged a gap in its fleet between the 777-300ER and A380. With Airbus having a product void beneath the A380 and above the A350, Korean Air has yet to consider the A350XWB given its existing commitment to taking 787’s.
Now that this deal is sealed, the question is not whether Boeing pushes on and decides to increase production rates on the 747 line, particularly as the bulk of 747-8 orders are for the freighter model amidst the worst environment seen in the cargo market for the last fifty years - the challenge probably isn’t even about getting the program executed on time - the real litmus test is whether there will be new customers for the 747-8 Intercontinental.
Considering the type has newer engines and many design and aerodynamic features lifted from the 777 and 787, it’s clear the 747-8 has been given a boost to soldier on, particularly as Boeing VP Marketing Randy Tinseth noted on his blog that the 747-8I had reached the 90% design release stage.
So just who will be next, and when?
62 comments December 4th, 2009
