Wednesday, July 6, 2011

Korean Air's High-Flying Plans

I caught up over coffee recently with Korean Air executive John E. Jackson III - and catching up wasn't easy. This was both because Jackson, a long-time veteran of the company, is a busy guy and because KAL is busy pursuing high-flying plans.

Jackson, an affable American who served as the carrier's first non-Korean marketing director, was perhaps genetically fated to work in the airline business. "When I grew up, both of my parents were working for Delta,'' he says with a grin. "I took my first airplane ride when I was two weeks old.''

These days, the Los Angeles-based Jackson is KAL's vice president for passenger marketing and sales, the Americas. In line with that, he notes that KAL, which flies more trans-Pacific flights between the United States and Asia than any other airline, will be bringing one of its first superjumbo doubledecker Airbus A380s to New York this summer. Next month, in fact, flying non-stop daily service between South Korea's Seoul/Incheon International Airport and New York's John F. Kennedy International Airport.

Here are excerpts from our conversation, with more details about Korean's corporate flight plan:

"We're going to put fewer seats on the A380 than any other airline: 403 - 12 in first class, 301 in economy and 92 in business. We'll devote the whole upper deck to business, the first airline to do so. The aircraft is big but it's not meant to hold 900 people.

"We're also going to install the first duty-free shop on an A380. There will be a bar and lounge on the upper deck, and they will be open for the whole flight.

"We derive 50 percent of our revenue from premium class customers. We have the product to support it. And the route structure, we've got that.

"We anticipate a lot of business and corporate travel on the New York route. A lot of the Fortune 500 companies are in the East, in New York.

"This year,'' he continues, "we'll be adding 20 percent more flights between Asia and the Americas. China is huge for us. (Due to the tragic Japan earthquake and radiation leak), a lot of people who used to transit through Tokyo, are transiting through Seoul/Incheon. A lot of people are experiencing our service. The airport is so well thought-of. It's definitely one of our advantages to have that airport.

''We're flying daily in San Francisco, daily in Seattle. We're going from three flights a week to five in Dallas, doing 10 a week from Chicago. We're up to five daily flights out of LAX (Los Angeles). We're very bullish on the L.A. market. The Korean market there is very important.''

Jackson acknowledges that KAL, like other airlines, lost some altitude during the global recession, but says the worst appears to be past.

"I wouldn't characterize it (business) as strong, but it's certainly coming back. We're probably back to about where we were. So, we've recovered, though we're about two years behind where we'd wanted to be. We've returned to profitability. A couple of years ago, the won (South Korea's currency) really dropped. We pay our fuel bills in U.S. dollars. Hedging fuel prices? No, we don't do a whole lot of it.''

Beyond North America, "We're looking seriously at every country in South America'' for possible explansion, Jackson says. But this will be done prudently. "Everybody's looking for yields thes days before you start to add flights.''

KAL also has a unit that operates business jets, coordinating that service with its regularly scheduled commercial flights. This, he says, is a growing niche. "There are a lot of companies that are using business jets, even those that own their own jets.''

With that, our coffee klatch is over. Jackson is outta here. Catching a plane, of course.

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