Boeing nearing deal to sell 777X jets to Korean Air

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9 months ago

Boeing is nearing a potential sale of some two dozen 777X jets to Korean Air in a roughly $4 billion to $6 billion deal that could be finalised as early as July’s Farnborough Airshow, industry sources said.

South Korea’s largest carrier has been in talks over a potential return to its traditional supplier of long-haul aircraft for months after placing a surprise order for 33 A350 jets from Airbus.

The sources said the potential new order could involve as many as 20 to 30 of the 777X aircraft, which are worth some $198 million each after typical market discounts, according to estimated delivery prices from Cirium Ascend, Reuters reported.

“We are discussing with manufacturers but nothing has been confirmed yet,” an airline spokesperson said.

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The fleet review comes as Korean plans to purchase nearly two-thirds of smaller domestic rival Asiana for about $1.4 billion. The European Union approved the tie-up in February and the airline has indicated it expects U.S. approval by the end of October.

Asked in April about Boeing’s ongoing corporate crisis, Korean Air Chairman Walter Cho told CNBC that Korean was a “satisfied customer of their 777s and that’s what I’m looking at right now”.

In June, Cho told Bloomberg News the airline was weighing a choice between the smaller Boeing 787 or more A350s. Since then, talk of a potential Boeing deal once again has focused mainly on the 777X, industry sources said.

The 777X is the industry’s largest twin-engined jet with around 400 seats but its entry into service has been delayed by five years due to problems including certification delays.