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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
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.
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