Korean Air has finalized a purchase agreement worth approximately 60 trillion won ($44.8 billion) that includes aircraft acquisitions. This agreement comes a year after the two countries agreed on a $350 billion investment plan, marking a significant step in the realization of the previously announced large-scale aircraft purchase plan. It is expected to strengthen the economic cooperation between South Korea and the United States, which had been in a state of uncertainty.
On September 16, Korean Air announced that it has signed a contract with Boeing for the purchase of 103 next-generation, fuel-efficient aircraft valued at $36.2 billion. Additionally, it has completed contracts with GE Aerospace and CFM International for approximately $8.6 billion in spare engine purchases and engine maintenance services.
This contract comes nearly a year after Korean Air signed a memorandum of understanding (MOU) with Boeing and GE Aerospace in Washington, D.C., in August of the previous year regarding aircraft and engine purchases and maintenance services. The large-scale purchase plan, which was only in the announcement phase at that time, has now moved into the execution stage with the signing of the final contract.
Korean Air's purchase plan was mentioned separately during the agreement between South Korean and U.S. authorities on October 29 of last year regarding the $350 billion investment in the U.S. At that time, the two countries agreed to invest $200 billion in U.S. strategic industries and allocate the remaining $150 billion to the 'MASGA' shipbuilding cooperation fund.
According to the contract, Korean Air will receive 20 Boeing 777-9s, 25 787-10s, 50 737-10s, and 8 777-8F freighters by the end of 2030. It will also purchase a total of 21 spare engines from GE Aerospace and CFM International. A 15-year engine maintenance service contract for 28 aircraft has been established with GE Aerospace.
The large-scale purchase is expected to have a significant impact on the U.S. aviation industry and employment. According to data compiled by the Korea International Trade Association after the Korea-U.S. trade agreement last year, the job creation effect from the purchase of Boeing aircraft is estimated to be 135,000 jobs.
This contract is also significant as it was made possible through communication and support from both the South Korean and U.S. governments, beyond just a large corporate transaction. The South Korean government has provided policy support and regulatory improvements to enhance the competitiveness of the aviation industry and has also offered financial support to back Korean Air's large-scale fleet investment.
Previously, the Korea Export-Import Bank announced it would support Korean Air with a total of 700 billion won, including 300 billion won in export financing and 400 billion won for supply chain stabilization. In July, Korean Air secured additional funding by issuing Samurai bonds worth 20 billion yen based on a guarantee from the Export-Import Bank.
Korean Air held a ceremony on September 15 at the Conrad Seoul Hotel in Yeongdeungpo, Seoul, to commemorate the signing of the final contract, attended by Hanjin Group Chairman Cho Won-tae, Boeing Commercial Airplanes President and CEO Stephanie Pope, and CFM President and CEO Gael Meoest.
Chairman Cho stated, "It is very meaningful that the promise made in Washington last year has come to fruition with the final contract. This agreement is a milestone of trust that strengthens the solid economic and technological alliance between South Korea and the United States, beyond just a corporate transaction."
* This article has been translated by AI.
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