Korean Air Inks Record $50 Billion US Aviation Deal (koreaherald.com)
- Reference: 0178888530
- News link: https://tech.slashdot.org/story/25/08/26/2321251/korean-air-inks-record-50-billion-us-aviation-deal
- Source link: https://www.koreaherald.com/article/10562107
> Korean Air, South Korea's flagship carrier, on Tuesday announced a sweeping $50 billion deal to purchase next-generation aircraft from Boeing and spare engines from GE Aerospace and CFM International, its [2]largest-ever investment aimed at fueling long-term growth . The deal, signed during President Lee Jae Myung's visit to Washington, includes $36.2 billion for 103 Boeing aircraft, $690 million for 19 spare engines, and a $13 billion long-term engine maintenance contract. The fleet order spans a wide mix of models: 20 Boeing 777-9s, 25 Boeing 787-10s, 50 Boeing 737-10s, and eight Boeing 777-8F freighters. Deliveries will be phased through the end of the 2030s. Korean Air will also acquire 11 spare engines from GE Aerospace and eight from CFM International, alongside a 20-year maintenance service agreement with GE covering 28 aircraft.
[1] https://slashdot.org/~schwit1
[2] https://www.koreaherald.com/article/10562107
Aircraft parts (Score:4, Informative)
For anyone who thinks the US doesn't manufacture anything... the largest US export segment is actually aerospace parts, which are expensive and high quality. In fact that's what the US generally manufactures for export: things that require a high degree of skill, education, and importantly stuff that relies on a trusted supply chain. Think pharmaceuticals, where you very much care about the pedigree of the ingredients that go into them. The same with aircraft parts... you want to make sure they're not made out of recycled pop cans. In our rush to bash the US for "not making anything" we should keep in mind what the US actually does make, and why the world likes to buy those things from the US in particular.
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> Think pharmaceuticals, where you very much care about the pedigree of the ingredients that go into them.
Yeah...about that...a large plurality (48%) of the [1]world's pharmaceuticals come from India [usp.org]. Next largest slice of the pie isn't the US, it's Europe (as a block, so kind of cheating) with 22%, then China with 13%, and then the US with 10% (remainder 7% comes from other nations). In the US alone, more than 10% of pharmaceuticals come from India. The US's pharma exports are [2]a paltry 94.39 billion USD [tradingeconomics.com] and [3]imports on pharma are 212.67 billion USD [tradingeconomics.com], so acting like the US is the big powerhouse of reliable pharma
[1] https://qualitymatters.usp.org/geographic-concentration-pharmaceutical-manufacturing
[2] https://tradingeconomics.com/united-states/exports-by-category
[3] https://tradingeconomics.com/united-states/imports-by-category
US is still the number 2 (Score:2)
Manufacturer on the planet. We can discuss why we arent number one anymore, but number two means we still manufacture a LOT of stuff.
And despite Boeings problems (which are totally real) there really isnt any real alternative to them if you want to buy commercial jets. Airbus is great, their planes are probably a tad better, but only if youre willing to place an order today and wait well over a decade for delivery. So those are options A and B. Option C would be oh wait there is no other viable option.
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Not just that but when you have 2 vendors the level of vendor-lock-in is rough so much so that many airlines buy from both companies just to diversify and make sure they have a good bargaining position when times to re-order. Pilots, mechanics, ground crew, a lot of these folks are trained on a specific aircraft so there is a lot of consideration.
There was a good video about how and why airlines choose their aircraft and Boeing's short term issues probably play not as big of a role as we'd think, there's
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> And despite Boeings problems (which are totally real) there really isnt any real alternative to them if you want to buy commercial jets. Airbus is great, their planes are probably a tad better, but only if youre willing to place an order today and wait well over a decade for delivery.
This is (un)fortunately true and Boeing is absolutely critical to the success of the US. However relying on this is not safe because China will eventually buy their way through whatever they need to do, even making things that are properly engineered and more or less apparently safe. That's the reason that the Trump regime's decision to undermine the various investigations into what happened at Boeing are really really bad.
Korean equivalent of harakiri? (Score:2)
Just sayin'; although paying that much money to off yourself - and to take out others at the same time - seems a bit drastic. (As an aside, I can't wait for the phrase "he Boeinged himself" to become common).
Also, to mangle metaphors, hitching any kind of wagon you rely on to an unstable and burgeoning totalitarian regime seems, er... let's just say "ill advised".
Was he held on gunpoint for this deal? (Score:3, Interesting)
Amid all the fiasco going on about Boeing, and with the recent Air India crash (that Boeing whistleblower had long warned about), who in their right mind would purchase Boeing!? Was he under some pressure to make this deal?
Re:Was he held on gunpoint for this deal? (Score:4, Informative)
Well, Boeing has had a lot of fiascos of late. He's probably generalising them altogether simply because they're all linked to crappy manufacturing standards.
There has been a number of related whistleblowers. Again all pertaining to the negative attitude of management toward quality control/assurance in the manufacturing process. But the first one goes back to around 2010 after the head of QA had failed (for over a decade of trying) to achieve any traction at the top of the company with rectifying the long list of degrading quality of manufacturing. Particularly from contractors.
Re:Was he held on gunpoint for this deal? (Score:4, Interesting)
Boeing "already agreed to plead guilty" in a deal where they had to "admit to conspiracy to obstruct and impede the lawful operation of the Federal Aviation Administration Aircraft Evaluation Group". They have now [1]been let off their guilty plea [citizen.org] by the Trump administration which means we actually know they did it but we also know it will never get fixed if it hasn't already been made public.
You cannot get a bigger fiasco than that. There can be components in Boeing planes which are under-specified for their, lets say, 20 year lifetime but will instead start failing after 12 or 15 years and suddenly cause Boeing aircraft to drop out of the sky. There can be software which didn't pass tests but was approved anyway. There could even be things like control surfaces for which the mechanical controls from the pilots don't have sufficient leverage to force movement. There could be people producing planes who don't check their tools and leave them inside fuel tanks where they could cause sudden loss of power. However, we would never know because we can never trust there to be verification of this.
[1] https://www.citizen.org/news/justice-departments-boeing-settlement-is-a-travesty/
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But hey we got rid of the Home Depot day laborers and restaurant prep workers! Please stop I can only take so much winning.
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This is either sarcasm or complete stupidity.
Re:Was he held on gunpoint for this deal? (Score:5, Insightful)
Most likely a mere +25% tariff point. No doubt it'll be a repeating pointy-ness for further "deals".
It has that feeling of a pyramid scheme. Eventually everyone gets sick of the rape.
Re: Was he held on gunpoint for this deal? (Score:3)
Or they start an Onlyfans.
Re:Was he held on gunpoint for this deal? (Score:5, Insightful)
> who in their right mind would purchase Boeing
The question is really "Who in their right mind would publicly claim to be on the brink of funneling billions of dollars into the US?". The answer is "anyone who wants some sort of concession from Trump". You don't have to actually do it (see all the previous failed-to-happen multibillion dollar business ventures), you just make a lot of noise about it and he'll give you whatever you want, or conversely not do whatever it is he's been threatening you with.
Re:Was he held on gunpoint for this deal? (Score:4, Insightful)
> We hear this a lot, and I wonder if it applies here too.
Of course it does.
Hint: The deal was announced in Washington, DC, not Seattle or Chicago.
This was political.
I assume the Koreans are shrewd enough to write the contract so they can back out if Trump fails to keep his side of the deal.
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> Either way, Boeing will be able to use this deal as collateral to get loans and whatnot to restructure their company into a crypto coin holding company.
Damnit AC. How can we recruit you as the new CEO of Boeing if we don't know who you are?
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Indeed. The clip I saw of the meeting with Lee and Trump was pretty weird. It's bizarre that this sort of meeting is now normal. It's one thing to show and express deep respect and understanding of a world leader, it's another thing to unabashedly heap over-the-top praise and flattery, and invite the president to personally profit from a political deal. But that is what leaders are lining up to give Trump. I'm not sure who such naked displays debase more, the groveling world leaders or Trump and the ent
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> who in their right mind would purchase Boeing
Boeing does not have a corner on the market on psychopaths. By the time the deal closes and the planes are delivered, most of the executives from Korean Air who made this deal will likely be retired, enjoying their golden parachutes. What do they care if a few of them fall out of the sky with hundreds of people on board?
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> who in their right mind would purchase Boeing!?
The fact Airbus cannot open their order books fast enough for the A320 and A220 families tends to have a lot to do with it... where as Boeing are struggling to sell the 737 MAX crash edition. Customers are also turning their noses up at the 787 Squeezeliner as almost every single one is configured for high density, which is the opposite for Airbus' widebodies. Airlines that care for customer comfort are taking note.
Korean was likely offered a very, very favourable deal on this with very few penalties for
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> who in their right mind would purchase Boeing!?
People who understand basic statistics. There's 14000 Boeing planes in the global air fleet currently most of which are flown daily. A handful of incidents are a rounding error in any risk calculation.
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These kind of deals take years to negotiate - this particular one probably started during the Biden administration or Trump's first term (and in Korea, the terms of President Yoon or President Moon who belong in opposing parties). Believe it or not, the deal was probably driven by KAL's business needs, particularly for long haul aircraft (which makes up most of the order), and not some kind of near term political pressure. The only thing political pressure impacted was the timing of the deal announcement -