Core Viewpoint - Korean Air has made a significant commitment to Boeing with a $36.2 billion purchase order for 103 aircraft, marking the airline's largest order and Boeing's largest widebody order from an Asian carrier [1][2]. Group 1: Purchase Details - The order includes 20 Boeing 777-9s, 25 Boeing 787-10s, 50 Boeing 737-10s, and eight Boeing 777-8F freighters, with deliveries expected by the end of 2030 [1]. - In addition to the aircraft order, Korean Air signed a $690 million deal for 19 spare engines and a $13 billion, 20-year engine maintenance service contract with GE Aerospace [8]. Group 2: Strategic Implications - The massive order is intended to support Korean Air's expansion to more destinations in the US, Latin America, and South America [3]. - This investment is seen as crucial for the future competitiveness of the merged airline with Asiana Airlines, which Korean Air acquired last year [10]. Group 3: Economic Impact - Boeing's press release indicated that the order would support an estimated 135,000 jobs across the US [2]. - Boeing reported a sales increase of 35% in the second quarter of 2025 compared to the same period in 2024, highlighting a potential turnaround in business performance [9].

Financial Data and Key Metrics Changes - The company reported a record GAAP net income of $1,300,000,000 for Q2 2025, with earnings per share (EPS) of $7.09, reflecting strong execution and demand for assets [6][15] - Adjusted net income was $502,000,000, with adjusted EPS of $2.83, leading to an increase in full-year adjusted EPS guidance to approximately $11.6 [6][20] - The liquidity position remains strong, with total sources of liquidity at approximately $22,000,000,000, including $2,700,000,000 in cash [19] Business Line Data and Key Metrics Changes - The company achieved a 99% utilization rate and a 97% extension rate in Q2, indicating strong demand for both wide-body and narrow-body aircraft [7][8] - Lease agreements were signed with 12 different carriers for narrow-body aircraft, and 30 extensions were completed with new leases signed at higher rates than previous ones [9][8] - The company continues to see robust demand for spare engines, with a portfolio of over 1,200 spare engines, 90% of which are new technology [10] Market Data and Key Metrics Changes - Global passenger traffic is growing, particularly in APAC and the Middle East, while domestic traffic in the US has declined [7] - The company noted that international traffic growth is outpacing domestic growth, demonstrating resilience in long-haul demand [7] Company Strategy and Development Direction - The company is focused on capital deployment, having spent approximately $3,000,000,000 on new equipment and over $1,000,000,000 on stock repurchases year-to-date [13] - A partnership with Air France KLM aims to expand engine leasing capabilities and support for customers [11][12] - The company is confident in its ability to capitalize on opportunities as OEMs ramp up deliveries in the coming years [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, citing strong performance and increased full-year guidance [21][22] - The impact of tariffs on the business has been minimal, with hopes for a return to a zero-for-zero tariff regime [55][56] - Management emphasized the importance of disciplined capital allocation and the potential for growth in the aviation leasing industry [78][79] Other Important Information - The company expects to spend another $3,000,000,000 on new equipment through 2025 and has $800,000,000 in share repurchase authorizations outstanding [13][20] - The average cost of debt remained stable at 4.1% [19] Q&A Session Summary Question: Size of the partnership with Air France KLM and capital allocation - Management indicated that the partnership opens up a broader customer base for the engine business, with initial growth expected to be small but long-term in nature [24][25] - Capital allocation includes over $1,000,000,000 for share buybacks and $3,000,000,000 for aircraft purchases, with attractive opportunities anticipated in the engine and leasing markets [26][27] Question: Outlook for leasing expenses - Leasing expenses have been lower due to high extension rates, which are expected to continue trending at lower levels [28][30] Question: CapEx expectations and potential for higher sale leasebacks - Current CapEx projections are based on contracted orders, with potential for additional opportunities as OEMs increase delivery rates [34][36] Question: Impact of Azul's bankruptcy - Minimal impact is expected from Azul's bankruptcy, as the company is fully provisioned for the restructuring [88][89] Question: Demand for spare engines and market dynamics - The company noted that the demand for spare engines remains strong, with reports of young aircraft being parted out primarily for engine harvesting [90][91] Question: Sale leaseback opportunities - Management clarified that they are unlikely to compete in open bid transactions, focusing instead on unique bilateral deals [96][97]