Korean Air in talks to buy Boeing 777X jets, sources say

By Tim Hepher, Joyce Lee and Allison Lampert

(Reuters) -Korean Air is in talks over the purchase of at least 10 Boeing 777X jetliners in a potential tilt back towards its traditional U.S. supplier after placing a major order with European rival Airbus, two industry sources said.

The discussions come weeks after Korean announced an order for 33 A350 jets from Airbus in what was widely seen as a breakthrough for the European planemaker into the flag carrier's Boeing-dominated wide-body fleet.

The sources said discussions between Korean Air and Boeing on the 777X, an upgrade of the 777 mini-jumbo already used by South Korea's largest carrier, were ongoing.

A third industry source with knowledge of the matter said Korean is in continuous discussions with Boeing on potential orders, but does not have immediate firm plans to take new 777s.

Korean Air did not have an immediate comment.

Boeing declined to comment on any commercial discussions and referred queries about fleet planning to the airline.

Earlier this month, Korean Air Chairman and CEO Walter Cho told CNBC following the Airbus deal: "We're not done yet. We're still talking with Boeing".

Asked about Boeing's recovery from a broad corporate crisis, he said: "We've been their customer, we've been their user for a long, long time...a satisfied customer of their 777s and that's what I'm looking at right now. And so hopefully soon we'll be announcing that as well."

The 777X is the industry's largest twin-engined jet with around 400 seats but its entry into service has been delayed by about five years due to problems including certification delays.

The fleet review comes as Korean Air plans to purchase nearly two-thirds of smaller domestic rival Asiana for about $1.4 billion in a move that requires anti-trust approvals, including from the United States and Europe.

The European Union gave conditional approval in February but stipulated among other conditions that Asiana's cargo business must be sold before it gives the final green light.

A second round of bids for that business is due on Thursday.

In February, an earlier round attracted bids from four South Korean low-cost carriers - Jeju Air, Eastar Jet, Air Premia and Air Incheon, a source with knowledge of the matter said.

(Reporting by Tim Hepher, Joyce Lee and Allison LampertEditing by David Goodman and Jane Merriman)