October 19, 2018
By Jamie Freed
JEJU, South Korea (Reuters) – Korean Air Lines Co Ltd <003490.KS> is very likely to order more Boeing Co <BA.N> 787 widebody jets to mainly replace its existing aircraft, as it seeks to streamline its fleet and reduce costs, its president said on Friday.
“We have too many fleet types now. Consolidating in one large order will help reduce maintenance costs and pilot training,” Walter Cho, president of the South Korean flagship carrier, told reporters.
“There is a very high possibility we will expand our fleet on the 787. The 777X would be a good replacement for our current 777 generation and we are also keeping in mind the A350 as well,” he said, in reference to an Airbus SE <AIR.PA> jet.
It is possible a decision on the widebody fleet would be made next year, Cho said, adding the airline held 10 options over 787s.
Korean Air, whose reputation has been tainted by scandals involving members of its owner-family, has seen business to Europe and the United States improve sharply from last year, but its China route traffic remained weak, Cho said.
Cho’s father, Korean Air Chairman Cho Yang-ho, was indicted this week on charges including embezzlement and breach of trust.
“I believe the brand and reputation starts with our employees. I’m trying to communicate more with them and make sure they are happy working with us,” the president said in his first public remark since the indictment.
“We are still struggling with China due to political issues. Japan is slowly but steadily regaining momentum at this time. We are doing much better than last year,” he said.
Cho also said that, as tensions ease over North Korea’s development of nuclear missiles, Korean Air is reviewing flight paths over the North.
“Overflying, there is already talks about that. We are discussing internally about that. It will save a lot of costs for us but we will be very careful about when to start that given U.S. tensions” with North Korea.
(Reporting by Jamie Freed; Writing by Miyoung Kim; Editing by Christopher Cushing)