Jeju Air to Introduce Next-Generation Aircraft in September

Sequential Introduction of B737-8... Strengthening Cost Competitiveness

Jeju Air is introducing the next-generation B737-8 aircraft. The company has expressed its ambition to catch the "two rabbits" of strengthening cost competitiveness and achieving sustainable growth.

The company will start by introducing two B737-8 aircraft in the second half of this year and will sequentially acquire new aircraft to replace the currently operated B737-800NG with the next-generation model.

First, the plan is to enhance cost competitiveness through changes in fleet operation methods. The existing operating lease method will be converted to direct purchase to secure cost competitiveness.

Fuel efficiency will also be improved to reduce fuel costs, which account for the largest portion of aircraft operating expenses. The company expects to reduce operating costs by about 12% annually compared to the current level by also cutting expenses such as lease fees and aircraft maintenance costs. This is also expected to help secure financial soundness.

[Photo by Jeju Air]

The B737-8 offers more than 15% improved fuel efficiency and about 50% noise reduction compared to existing aircraft. For example, the B737-800NG consumes an average of 15,400 kg of fuel on the Incheon-Bangkok route. In contrast, the B737-8 consumes about 18% less fuel, at 12,600 kg. The reduced 2,800 kg of fuel is enough to operate one flight on the Busan-Jeju route.

Despite rising aircraft lease fees, the company’s strategy is to introduce aircraft stably through proactive purchase contracts. In the first quarter of this year, aircraft deliveries increased by 37% year-on-year to 130 units. According to data from Cirium, a global aviation information analysis firm, lease fees for Boeing B737-800NG models have risen 32% and Airbus A320-200 by 21% over the past year.

The company signed a purchase contract with Boeing in November 2018 for 50 B737-8 aircraft (40 confirmed, 10 options). Among these 50 units, 40 represent the largest purchase contract ever signed by a Korean airline for a single aircraft model.

A Jeju Air official said, “Starting this year, we will sequentially introduce next-generation aircraft and proceed with full-scale fleet modernization. We will secure overwhelming cost competitiveness compared to competitors and build a foundation for sustainable growth based on this.”

This content was produced with the assistance of AI translation services.