Asiana to buy six Airbus A380s
South Korea’s Asiana Airlines said Thursday it had agreed to buy six
Airbus A380 superjumbos in a deal worth $1.8 billion as it tries to cash
in on booming demand from China and the rest of Asia.
The country’s second-largest carrier said the European manufacturer
had agreed to deliver the planes between 2014 and 2017, adding they
would be used on routes to Europe and the United States.
The agreement, worth 2.04 trillion won ($1.8 billion), comes as an
easing of visa rules on South Korean visitors to the United States and
an ever-growing number of Chinese travellers fans demand for lucrative
trans-Pacific flights.
“Long-haul flights are expected to grow by more than five percent
each year due to free trade agreements (with the United States and the
European Union) and the visa waiver programme,” CEO Yoon Young-Doo said
in a statement.
“We made the decision to accelerate our growth,” he said.
The deal will also come as a welcome boost for Airbus, which late
last year came under intense pressure after Qantas grounded its A380
fleet following an engine blow-out.
It is the second A380 deal the maker has signed with an Asian carrier
since the incident, after Japan’s Skymark agreed to buy up to six of the
double-deckers.
Seoul-based Asiana has largely operated short-haul routes into Asia,
while its bigger rival, Korean Air, has dominated the long-haul market.
The aggressive investment plan came as airline operators seek to
capitalise on soaring demand from China’s increasingly affluent
population and to attract more Asian passengers travelling to the US and
Europe.
“The ultimate goal here is attracting more travellers from China and
Southeast Asia who transfer flights in Incheon airport to go the US and
Europe,” said Song Jae-Hak, analyst at Woori Investment and Securities,
referring to South Korea’s main international airport.
China’s demand for airline services in 2010 grew nearly 40 percent
from a year earlier despite the global downturn which stifled growth in
industrialised markets, Song said, calling Asiana’s investment plan
“doable.”
“It’s about absorbing more demand from the neighbouring Asian
region... and the A380 is the best option to transport the maximum
number of passengers, up to 700 people for each flight,” he said.
China’s rapidly expanding economy has seen the country’s aviation
sector grow at a blistering pace over the past few years, with few
analysts seeing any likelihood of a slowdown.
In September, Hong Kong-based Cathay Pacific said it had confirmed an
order for 30 long-range A350 Airbus aircraft with a book price of $7.82
billion — the biggest single order in the carrier’s history.
Industry association IATA last month warned global airline earnings
for 2011 would slide amid high fuel prices and ongoing European debt
crisis dampening demand.
Growth will largely come from fast-growing Asia, which will post 4.6
billion dollars in earnings in 2011, half of next year’s profit, the
International Air Transport Association has forecast.
AFP |