Photo = Korean Air

 

[Alpha Biz= Reporter Kim Jisun] orean Air has announced an additional order of six Airbus A321neo aircraft, bringing the total number of this next-generation model in its fleet to 56, including previous contracts. The airline clarified that the additional purchase was an exercise of options set under the original agreement, driven by favorable exchange rate terms from October 2022.

Details of the Order
According to the aviation industry, Korean Air initially signed a contract with Airbus on October 30, 2022, to purchase 20 A321neo aircraft. The agreement included an option to purchase six additional units under the same terms. Exercising this option increases Korean Air's investment in these aircraft from KRW 4.0947 trillion to KRW 5.3580 trillion. Consequently, the company’s debt-to-equity ratio has risen from 44.07% to 57.66%.

The exchange rate applied to this transaction is USD 1 = KRW 1,352.3, based on the rate from the original contract date. This is lower than the KRW 1,414.9 exchange rate as of December 5, 2024, making the transaction relatively cost-effective.

Previous Aircraft Acquisitions and Strategic Moves
This latest order comes after Korean Air made a major purchase of 33 Airbus A350 aircraft for KRW 18 trillion in March 2024. This deal coincided with the European Commission’s (EC) conditional approval of Korean Air’s merger with Asiana Airlines. The EC officially granted final approval for the merger on November 27, 2024, after determining that concerns over monopolistic elements, such as cargo services and European routes, had been addressed.

In another significant deal, Korean Air signed an MOU with Boeing at the Farnborough Airshow on July 22, 2024, for the acquisition of 20 B777-9 and 30 B787-10 aircraft, including an option for 10 additional units. This contract is estimated to be worth approximately KRW 30 trillion.

Strategic Implications
With these investments, Korean Air is strengthening its fleet modernization efforts and expanding its capacity to meet growing demand for air travel and cargo services. These acquisitions also position the airline to remain competitive on both regional and international routes, particularly as it integrates operations with Asiana Airlines.

 

 

 

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