Korean Air to Buy 25 Aircraft from Boeing for $5.5 Billion

South Korea's flag carrier Korean Air said Tuesday it will buy 25 aircraft from Boeing Co. for around $5.5 billion, the largest aviation deal in the nation's history.

Under the agreement, Boeing will deliver 15 passenger aircraft and 10 freighters to Korean Air Co. - the world's biggest mover of air cargo - over a 10-year period beginning in 2009, the airline said in a statement.

Korean Air will purchase 10 long-haul 777-300s and five medium-range 737-900/700 passenger jets, as well as 10 freighters, five 747-8Fs and five 777-200s. It has an option on an additional eight planes: four 777-300s, two 747-8Fs and two 737-900s.

"The addition of Boeing's aircraft to our fleet will play an integral part in our development to become a leader in the world's aviation industry," Korean Air's chief executive, Cho Yang-ho, said in a statement.

Korean Air will use the planes to take a larger slice of global passenger traffic and "become one of the world's top 10 passenger carriers by 2010," the statement said.

The Seoul-based company, which operates a fleet of 118 aircraft in 33 countries, forecast annual aviation sector growth of 5 percent to 6 percent over the next two decades, spurred in part by China's economic boom.

The contract was signed in Seoul on Monday by Korean Air's Cho and Boeing's vice president of commercial sales, Larry Dickenson.

In May 2005, Korean Air ordered 10 of Boeing's B787 Dreamliner jets, still in development, with an option for another 20.

It has also placed an order for five A380s superjumbos from Boeing's rival, Airbus.

Korean Air shares traded in Seoul dipped 1.8 percent to 35.500 Korean won (around US$37.80) following the news.

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