Hello All,
Korean Air announced that it would order 27 A350-1000s and six A350-900s, another potential order listed earlier this year. This blog is surprised the carrier did not wait for the merger with Asiana to be completed. The Korean flag carrier committed to becoming the second largest A350-1000 operator after Qatar Airways.
This post analyzes how the A350 order will likely fit into the merged carrier’s future fleet plans. This post assumes the USA, the last holdout, will approve the merger between Asiana Airlines and Korean Air.
A large combined fleet needs simplification
The table below shows the combined Asiana and Korean Air passenger fleets, and future orders:
| Family/Variant | Asiana | Korean Air | Total In Service | On Order |
| A220 | 10 | 10 | ||
| A320ceo | 14 | 14 | ||
| A321neo | 9 | 9 | 18 | 57 |
| 737 NG | 17 | 17 | ||
| 737-8 | 5 | 5 | 23 | |
| A330ceo | 15 | 25 | 40 | |
| A350-900 | 15 | 15 | 21 | |
| A350-1000 | 0 | 27 | ||
| A380 | 6 | 10 | 16 | |
| 747 | 1 | 9 | 10 | |
| 767 | 1 | 1 | ||
| 777 ex -300ER | 9 | 12 | 21 | |
| 777-300ER | 25 | 25 | ||
| 787-9 | 13 | 13 | 7 | |
| 787-10 | 0 | 20 | ||
| Total | 70 | 135 | 205 | 155 |
Among the 205 aircraft operated, 144 are older-generation. Of those, 50 (16 A380s, 9 747-8s, and 25 777-300ERs) are for long-haul operations. Depending on how one counts the remaining seven 787-9s, there are between 48 (21 A350-900s and A350-1000s) and 55 outstanding orders for long-haul aircraft.
There are 100 aircraft (23 737-8s, 57 A321neos, and 20 787-10s) for Domestic and intra-Asia operations, vs. 94 aircraft to replace (14 A320ceos, 17 737-NGs, 40 A330ceos, 1 747-400, 1 767-300, 17 777-200(ER)s, and 4 777-300s). Some of the A321neo or 737-8 orders will likely go to low-cost carriers within the newly merged group.
There are rumors that Korean Air might retire its A220-300 fleet to simplify the combined carrier’s fleet.
Covering Basic needs
This blog thinks the latest order covers the basic fleet replacement needs the carrier will have no matter the traffic growth scenario. The carrier does not want to be haunted by operating excessively large A380s.
The carrier did not announce which aircraft will be retired first. However, an earlier announcement mentioned that the A380s would leave the carrier’s fleet before the 747s. Korean Air and Asiana also operate a combined 21 747 freighters (14 747-400Fs and 7 747-8Fs). It wouldn’t be surprising if the Superjumbo leaves the fleet first, along with the two Asiana 767s.
The outstanding payload-range capabilities of the A350-1000 are the major reason the carrier thinks it will be able to deploy it profitably within the network. Korean Air has large long-haul cargo operations that require highly capable aircraft, especially in the context of the Russian airspace closure.
Korean Air must have also been impressed by the A350-900’s performance when looking at Asiana Airlines’ data room. Combined with aggressive A350-1000 pricing from Airbus and earlier (and more certain) delivery slots, the decision to favor the A350 is not a surprise.
A future 777X order cannot be ruled out
The uncertain timing of the 777X certification and entry into service probably led the Korean flag carrier not to order the aircraft yet. It does not mean that such an order will not materialize.
The 777-9 has less payload-range capabilities than the A350-1000 but more cargo volume. The carrier also operates long-haul trunk routes, notably from Seoul to Los Angeles, where profitably filling a 777-9 is not a problem. As long-haul traffic recovers, this blog believes the Korean flag carrier’s network can justify 777-9 operations.
Once the 777-9 certification materializes and Boeing increases the MTOW, Korean Air might consider a combined 777-9/777-8F order. Whether a 777X order materializes will also depend on how the combined carrier envisions replacing its 34-strong freighter fleet.
Other factors could affect a potential 777-9 order. Korean Air will likely need to provide remedies to US regulators to gain merger approval. The most likely outcome is giving numerous slots to US carriers, notably on the Seoul to Los Angeles routes. Not committing to the 777-9 gives Korean Air options to assess the required concessions.
Lastly, demography will have a drastic impact on future traffic growth in South Korea. The country is not a major inbound tourism destination like Japan. The 15-64 population is projected to shrink from 36.6 to 24.5m by 2050, or one-third, over the likely operational life of the A350-1000. This is around 3x more than the capacity difference between the A350-1000 and 777-9.
Conclusion
Korean Air firmed a large share of its future fleet replacement needs. But unlike Japan Airlines, there are still quite a few more orders to place, notably for freighters. While Boeing sorts out its production and certification issues and long-term passenger demand stabilizes, Airbus increases its twin-aisle market share.
This blog believes the American OEM still has a good chance to receive a 777X order from the most promising customer for the new aircraft.
