17-Jun-2011 5:53 PM

Korean Air becomes first Northeast Asian A380 operator

Analysis

Korean Air became the first A380 operator in Northeast Asia and the sixth worldwide on 17-Jun-2011, launching A380 service between Seoul Incheon, Tokyo and Hong Kong. Airbus Executive VP Europe, Asia and Pacific Christopher Buckley stated Airbus is optimistic about additional orders for the A380 at the Paris Air Show. Over the longer term, Airbus expects to win customers for the A380 in the US market. So far sales have been largely in Asia and Europe.

Summary

Korean Air became the first A380 operator in Northeast Asia and the sixth worldwide, launching A380 service between Seoul Incheon, Tokyo, and Hong Kong.
Korean Air plans to expand its A380 service to short-haul routes in Asia and long-haul routes to destinations in Europe and North America.
Korean Air has ordered 10 A380 aircraft, with the first five to be delivered by the end of 2011 and the remaining five by 2014.
Korean Air operates the lowest density A380s in the industry, with a three-class layout and 407 seats.
Korean Air has introduced a flying duty-free shop on its A380, becoming the first airline to offer this service.
Asiana Airlines also plans to add six new A380s to its fleet in 2011 for US and European services.

Expanding network from Asia to Europe and North America

Korean Air will gradually expand its A380 service to short-haul routes in Asia, such as Bangkok in Jul-2011, followed by long-haul routes to destinations in Europe and North America, such as New York in Aug-2011, Paris in Sep-2011 and Los Angeles in Oct-2011. Meanwhile, Atlanta Hartsfield-Jackson International GM Louis Miller this month stated Korean Air expects to use the A380 on services to Atlanta "sometime next year". Korean Air operates B747 equipment on Seoul-Atlanta service at present. A380s are operated on 27 routes to 20 destinations on a worldwide basis.

Growing A380 network especially in Asia-Pacific 49 A380s flying 27 routes to 20 destinations

Korean Air has ordered 10 A380 aircraft with the first five to be delivered by the end of 2011 and the remaining five by 2014. The aircraft was received on 02-Jun-2011 after successfully completing final flight and ground tests in Toulouse. The carrier's first A380 has been financed by an ECA-backed agreement with Crédit Agricole CIB and KfW.

Korean Air operates lowest density A380s

Korean Air is operating the lowest density A380s in the industry, configured in a three-class layout with 407 seats. The A380 cabin features 12 first class, 94 business class and 301 economy class seats. Korean Air has also taken the bold step of being the first carrier globally to devote an entire deck of the A380 to a single class, with the deck to feature only business-class seats. On the other end of the spectrum, Air Austral has floated an 840-seat configuration.

Known A380 configurations

Airline	First	Business	Premium economy	Economy	Total
Korean Air	12	94	0	301	407
Skymark	-	-	-	-	400-450
Qantas^	14	72	32	332	450^
Singapore Airlines	12	60	0	399	471
Emirates (long range)	14	76	0	399	489
China Southern	8	70	0	428	506
Thai Airways	12	60	0	435	507
Malaysia Airlines	8	54	26	420	508
Air France	9	80	38	389	516
Emirates (long range)	14	76	-	427	517
Lufthansa	8	98	0	420	526
Air France	9	80	-	449	538
Air Austral	0	0	0	"Around 840"	"Around 840"

Korean Air becomes first carrier to offer flying duty free shop

In addition, Korean Air has become the first airline to offer a flying duty free shop. The stall has been designed and manufactured for Korean Air by AIM Aviation and will replace 13 seats on the A380. The carrier expects to make up for the lost revenue in duty free sales.

Lancome has purchased the first advertising spot inside the shop, which will promote "new, existing and exclusive products" from the airline's duty-free range. It will be complemented by the continuation of the regular cart service, according Heather Cho, from Korean Air's Catering and Inflight Sales Business Division, speaking with Australian Business Traveller.

The Korean flag carrier is hopeful the new A380 offering will turn around a slump in its inflight duty free sales. Korean Air has set a target of USD200 million in inflight duty free sales revenue for 2011 - in line with USD201 million generated in 2010. Deputy General Manager Inflight Sales, JY Jung, told Trend: "The indiscriminate promotions of airport duty free shops have seriously affected our inflight sales. Monthly revenue has gradually decreased since Jun-2010 and the slump is continuing."

Korean Air stated its duty free sales rankings by value for May-2011 saw Ballantine's Scotch whisky (Blended whisky), Shui Jing Fang (other liquor), Chanel fragrances (perfume), SK-II (cosmetics), Hawaiian Sun (confectionary) and Swarovski pendant (accessories) lead their respective categories for a second consecutive month.

Asiana Airlines to also add A380s in 2011

Also in South Korea, Asiana Airlines CEO Yoon Young Doo, quoted by Bloomberg on 31-Mar-2011 stated the carrier plans to add six new A380s to its fleet in 2011 for US and European services. It has been previously reported officially by the carrier that it would take delivery of the first A380 in 2014. Asiana has also announced the award of a contract to Rolls-Royce for Trent 900 engines to power six A380 aircraft. The order includes a TotalCare long-term service agreement.

Asiana, Skymark and Hong Kong Airlines make A380 orders in 2011

Airbus has taken 10 A380 orders this year, six from Asiana Airlines and four from Japanese LCC Skymark Airlines, with Hong Kong Airlines to be the third new A380 customer this year when it announced either an MoU or LoI at next week's Paris Air Show. Hong Kong Airlines will also become the second operator in the Greater China region to order the A380. China Southern Airlines expects to take delivery of the first of its five A380s in Sep-2011. China Southern Airlines Chairman Si Xian Min recently confirmed that the carrier is expecting another of its five A380s on order in Nov-2011.

Airbus CEO Tom Enders, in May-2011, said the manufacturer still intends to deliver around 25 A830s in 2011, as Rolls-Royce recovers from problems with the Trent 900 and Airbus eliminates the last production issues. After delivering its 10th A380 this year to Korean Airlines, Airbus plans to deliver four more to the carrier before the end of the year. Orders currently stand at 234, with 49 aircraft in operation at present.

Airbus A380 orders and deliveries: as of 31-May-2011

Customer	Region	A380
Customer	Region	Orders	Deliveries	In operation
Airbus Executive/private jets		1
Air Austral	Europe and CIS	2
Air France	Europe and CIS	12	5	5
Asiana Airlines	Asia Pacific	6
British Airways	Europe and CIS	12
China Southern Airlines	Asia Pacific	5
Emirates	Middle East	90	15	15
Etihad Airways	Middle East	10
Kingfisher Airlines	Asia Pacific	5
Korean Air	Asia Pacific	10	1	1
Lufthansa	Europe and CIS	15	7	7
Malaysia Airlines	Asia Pacific	6
Qantas Airways	Asia Pacific	20	10	10
Qatar Airways	Middle East	5
Singapore Airlines	Asia Pacific	19	11	11
Skymark Airlines	Asia Pacific	4
Thai Airways	Asia Pacific	6
Virgin Atlantic	Europe and CIS	6
Total		234	49	49