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Korean Air Integration of the Asiana Maintenance Division
Targeting the global MRO market of KRW 132 billion
The reason why the government wants to establish an integrated public-private corporation dedicated to aircraft maintenance (MRO) is simple. This is to increase international competitiveness in the field of MRO, which is the foundation of the aviation industry, and to ensure the survival of airlines.
The Korean Air MRO is in charge of the Aerospace Division. The total workforce is 1,900 people. Including all maintenance personnel, there are more than 5,000, but models such as the Boeing 777 freighter are outsourced. A company official said: “It is common to drive empty passenger jets abroad for maintenance.” Asiana Airlines doesn’t even have a separate MRO division. Instead, it outsources to Lufthansa Technic, the world’s largest MRO company. Last year, the size of the domestic MRO market reached 2.76 trillion won, but half of this, or 1.25 trillion won (45.5%), is left to foreign companies.
The government believes that there is an urgent need to reduce the cost of outsourcing MROs moving abroad. To this end, the government and creditors are considering a plan to integrate Korean Air and Asiana Airlines’ organizations and maintenance personnel into separate corporations. The government’s plan is to attract defense companies such as KAI and Hanwha Aerospace to establish a joint venture based on joint ventures. In the long term, it is known that it is also considering plans to enter the defense MRO market, including not only civilians, but also fighters by attracting LIG Nex1.
In the long term, the government also plans to target the global MRO market. The size of the MRO market consisting of maintenance, repair and overhaul reached $ 77.5 billion (approximately 84.2 trillion won) in 2017. It is expected to increase 4.6% each year to reach $ 118 billion (about 133.6 trillion won) by 2027. A senior defense industry official emphasized, “If a joint private government mega MRO corporation is launched, it will be competitive enough in the global market.”
Reporter Kang Kyung-min [email protected]
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