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Korean Air approves $10 billion deal to modernize fleet with Boeing's Dreamliner

Key Points
  • Korean Air is to upgrade its fleet with 30 Boeing Dreamliners.
  • The list price for the 20 purchases and 10 lease arrangemnents is around $9.7 billion.
  • A commitment to make a deal with Boeing was first announced at the Paris Air Show.
Boeing Commercial Airplanes vice President Ihssane Mounir, Boeing Commercial Airplanes CEO Kevin McAllister, Korean Air CEO Walter Cho and Air Lease corporation CEO John Plueger pose with models of Boeing 787 Dreamliner at a commercial announcement during the 53rd International Paris Air Show at Le Bourget Airport near Paris, France June 18, 2019.
Pascal Rossignol | Reuters

Korean Air confirmed it will spend a reported $9.7 billion on new Boeing aircraft to overhaul its aging fleet.

The Asian carrier has approved a budget of $6.3 billion to spend on 10 787-9 and 10 787-10 Dreamliner planes. A further 10 Dreamliner aircraft are to be leased at a cost of $3.4 billion.

The figures quoted are based on Boeing's commercial list pricing and a discount can be expected. Confirmation of the purchase came after the close of Thursday trade in the South Korean Kospi index.

The deal was first announced in June at the Paris Air Show but has now been signed off by the board of Korean Air, according to Reuters. The investment will be made between now and 2025.

Boeing's Dreamliner series, or 787, is a long-haul wide-body commercial plane that can seat up to 335 passengers. First introduced in 2011, the plane was considered a step up for fuel efficiency, range, and passenger comfort.

At present Boeing has delivered 859 of its 1,441 Dreamliner orders.

Korean Air Chairman Walter Cho has previously said the aircraft will become the "backbone" of the airline's mid and long-haul fleet strategy and will replace its existing Boeing 777s, 747s and its Airbus A330s.

Korean Air wants to modernize its fleet to save on fuel costs and quell criticism that its planes are particularly bad for the environment.

Research from the Transition Pathway Initiative (TPI) in March this year identified the firm as the worst-performing major airline for emitting carbon particles into the atmosphere.

In a ranking of 20 airlines, stretching back to 2014, TPI found that Korean Air flights emitted between 170 and 200 grams of CO2 per passenger-kilometer.

By comparison Delta, Southwest and Qantas were calculated as closer to 100 grams of CO2 per passenger-kilometer.

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