Interview: Korean Air's Keehong Woo

Seoul - Speaking here this month to members of the media on the occasion of Korean Air's inaugural Airbus A380 flight to New York JFK, managing vice president and head of passenger business division Keehong Woo said that by deploying the world's largest commercial aircraft, the airline hopes to better market itself to international corporations. He admitted that dedicating the entire upper deck to business-class passengers is risky, but noted strong demand from both Korean and international corporations seeking connections to Asia and other markets. According to Woo, 36 percent of business-class passengers connect through the Incheon hub to other Asian cities. He also claimed that Korean Air has the largest transpacific market share of any carrier. Additional excerpts of the press briefing follow.

How would you characterize the way that Korean Air has used the extra space to brand the airline?

We put all business class in our upper deck. It looks like a business jet for Korean Air, and it is a dedicated area. We put a business lounge in the upper deck and we have another small lounge in business class, so we are the first airline that has dedicated all seats to business ... so that our business class would be comfortable having their own cabin. We also have another first-class lounge in front of the main deck and also we have a duty-free showcase. That is special to Korean Air.

Is this a sign that you want to go after the top premier customers?

Most airlines have put economy class in the rear of the upper deck—they can fit 80 or 90 economy seats—but instead we put business class. It's 70 business seats. We have more potential to develop a business-class market than to develop economy demand. We think that we [can] develop and take business customers from other airlines.

Have you seen any change in the breakdown of U.S. passengers versus Korean?

Forty percent are from the Korea region, 40 percent are American and 20 percent are from other regions. We have been seeing other regions growing, like China. We have some flights from Southeast Asia and the demand is growing. The inquiries are growing, their economies are growing, and a lot of people can afford to travel.

Almost every month we offer new routes to China. With SkyTeam, many corporate [accounts] are becoming aware of Korean Air and now many corporate travelers are using Korean Air.

Was there any nervousness about not being able to sell those business-class seats, as the economy took a turn for the worse?

We think that in some markets like Los Angeles and New York—or big cities in European countries—we can build up our business. [The A380] is for international trips. We have 25 destinations in China and 12 destinations in Japan. We can put more [Boeing] 737 aircraft [in those markets], and we can develop a lot of smaller cities in China and in Asia. Now we have two A380s and are expecting to have five.

The main users are from Korea and Korean companies like Samsung; they have huge global operations. Samsung sales in Korea are only 5 percent, or very small. A lot of Samsung executives from all over use business class, and they are our big customers: Not only passengers, but cargo is big. The situation of the Korean companies is strongly related with Korean Air's performance.

We are tying to diversify our customer base in the United States, in Europe and in China. Everyone's economy is weak, but the Korean economy is better than other developing countries.

Are you seeing an increase in SkyTeam corporate contracts?

Korean corporations are our biggest customers now. We are trying to get more corporations, especially from the U.S. We have hired a lot of sales representatives, we are coordinating with Delta and SkyTeam, and we have global contracts with big corporations like IBM, Pfizer and Johnson & Johnson, and other contracts for big conferences throughout the year.

We have both alliance contracts and Korean Air contracts; some [corporate customers] don't want SkyTeam contracts. Because of Delta, we are seeing a lot of sales in the U.S. and sales in Asia.

Have you seen business rebound from Japan?

It's very slow, especially going into Japan. Our demand decreased a lot from America and European countries. The demand going to Japan [from America and Europe] decreased about 30 percent but the Korean market decreased more than 60 percent. More people are commuting out of Japan—that has increased. Because of the strong yen, [Japanese] are traveling to Korea now instead of Koreans going to Japan.

Are you looking to expand service to Russia?

We are seeing some opportunities in connecting from Asia to the Middle East and European countries. To Russia, the flight time is two hours—it's very close, especially eastern parts of Russia. For Russians, Incheon is their hub for connecting outside of the country, and they are going through here to go to anywhere—Americas, Southeast Asia. The eastern parts of Russia can be a gateway to connect to other parts of Russia, like Moscow.