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Korean Air Part 1:Ignores trans-Pacific expansion to lift profits. Future service with 747-8 & 787-9

Analysis

The trans-Pacific market between Asia and North America has been experiencing a growth surge, with available seats growing about 10% in each 2014 and 2015 after years of limited growth. This has been accompanied by yield pressure, but most airlines appear willing to sacrifice performance for a long-term shot at market share.

This is not the case at Korean Air, which has typically been the largest Asian carrier across the Pacific and second overall only to United. In 2015, Cathay Pacific and Delta will surpass it. Korean Air, having already built up scale, is now focussing on financial performance instead of capacity growth. Korean Air VP Americas John Jackson, speaking at CAPA's Americas Aviation Summit in Las Vegas, says that with 13 destinations in North America, Korean Air is not looking immediately to add new points but will selectively add frequencies over time.

Not all services will be made daily and Korean Air does not plan a hyper-frequency approach of multiple 777 flights a day; instead it offers double daily A380 flights to Los Angeles and New York and will soon add 747-8s and 787-9s to its fleet. About 50% of Korean Air's North American passengers transfer beyond Seoul. China is the large opportunity followed by core Southeast Asian markets like Thailand, Singapore and Vietnam and then smaller "boutique" markets like Cambodia and Myanmar .

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