Soo-Keun Lee, executive vice president of Korean Air. Korean Air
Soo-Keun Lee, executive vice president of Korean Air.

Korean Air Looks To Grow MRO

Soo-Keun Lee, Korean Air’s executive vice president and chief technology officer, outlines the airline’s intentions to invest in new technologies, explore potential partnerships and grow third-party MRO work.

As one of Asia-Pacific’s largest carriers by fleet size for more than three decades, Korean Air also operates a sizable maintenance unit. Soo-Keun Lee, Korean Air’s executive vice president and chief technology officer, outlines the airline’s intentions to invest in new technologies, explore potential partnerships and grow third-party MRO work.

What are some of the key elements of Korean Air’s MRO operation?

Our MRO operation is focused on three key elements—standardization, specialization and efficiency. Standardization establishes optimized maintenance procedures and quality-assurance systems. Specialization reinforces core capabilities on high-tech and high-value-added areas. Efficiency maximizes utilization of limited resources based on strategic focus, which is primarily driven by the lifecycle return on investment effect. For our new paperless system developed for technical operations, we introduced a new mobile maintenance system that enables our employees to get quick access to and make on-site transactions with a management information system. This will be one of the successful cases for increasing operational efficiency by changing the existing processes.

Korean Air

Soo-Keun Lee, executive vice president of Korean Air.

What is the ratio of in-house Korean Air work to third-party customers?

We have been developing maintenance capabilities for airframes, engines and components primarily to support our own fleet. Third-party work is currently limited to around 10% of our in-house work, which generates about $120 million per year. However, we will continually expand third-party work in the coming years, especially in engine MRO, by cooperating with OEMs.

Why did you decide to build a new test cell at Incheon with Pratt & Whitney? How has this helped Korean Air’s MRO operation?

In 1994, we opened the Bucheon Power Plant Center in Korea, which consists of engine and module maintenance facilities and an engine test cell. At first, it had sufficient capability to support the engines in operation. However, as new engines with higher thrust ratings were introduced to our fleet, we had to outsource engine tests for the larger ones such as the PW4090 and GE90. The existing test facility couldn’t meet the increased demand in terms of airflow and structural conformity. This led us to set up a new engine test facility in 2010, the Incheon Aviation Tech Co., in cooperation with Pratt & Whitney. Since starting operations in June 2016, it has completed 120 flawless engine tests, including for third-party engines. Holding approvals for Pratt & Whitney PW4168, PW4170, PW4090 and GE Aviation GE90 engine tests from the FAA, European Aviation Safety Agency and Civil Aviation Administration of China, I am confident this new test cell will take a pivotal role in fostering engine MRO business in the future.

Is Korean Air open to more joint ventures like the one with Pratt & Whitney?

We’re continuously looking for possible ways to work with OEMs or other airlines to keep up with current global MRO trends. Although we do not have a specific plan yet for a joint venture in the near term, we will pursue the opportunity to come up with a win-win business model, in which we can focus on developing in-house capability together with OEMs or others, for new high-tech areas of the digitalized aircraft while outsourcing less competitive areas to those who are capable.

How is Korean Air embracing new technologies for its MRO services?

Last year, we introduced the Boeing 787 and Bombardier CS300, with plans to take delivery of the Boeing 737 MAX and Airbus A321neo next year. As these aircraft require new maintenance technologies, we have built up capabilities for them through undertaking an OEM training course before launching the fleet. We have also put our efforts into improving efficiency by effectively implementing new IT technologies, such as big data analysis, into our processes. Technologies using big data will enable us to easily analyze huge application control management systems and quick-access recorder data from the aircraft, facilitating more rapid and accurate prognostics health management by extracting meaningful information in a timely manner. Ultimately, Korean Air is eager to embrace new technologies to minimize technical disruption and unplanned maintenance activity.

Bringing young people into the industry is a long-term challenge for most companies. How has Korean Air attracted younger talent for MRO?

Fortunately, as Korean Air is among the most prominent airline and MRO businesses in the country, we are on the priority list for talented applicants for airline maintenance and engineering jobs, many of whom are majoring in aeronautical or aviation-related engineering. Typically, we recruit and train them as aeronautical engineers once a year. Since 1992, we’ve run our own Aeronautical Technology Training Center, a vocational training institute for technicians in the aviation industry, to nurture necessary job skills and competencies. The two-year training course is run in accordance with the educational curriculum prescribed by the International Civil Aviation Organization and Korean government agencies. We recruit and train about 60 people annually and hire them as technicians for aircraft line and base maintenance, powerplant shop maintenance and component shop maintenance.

Which of your MRO services are seeing growing customer demand?

Despite the number of PW4000 engine operators decreasing in number, [the engine’s] MRO demand has been increasing, and we expect this trend will continue for the time being. We strive to balance repair capabilities between legacy and new engines. To plan for more potential growth, we are in the process of developing full capability for the GE90 engine, targeting completion by mid-2019.

What are the challenges of operating in the competitive Asia-Pacific region?

Labor costs are one of the main challenges for developed countries in the Asia-Pacific region, including South Korea. If the domestic business environment and high labor costs can’t be mitigated to help us compete, there is no alternative to outsourcing labor-intensive aircraft base maintenance. First, we began to outsource A380 D checks last year to external service providers in the Southeast Asian region. This year, we are planning to gradually expand aircraft base maintenance outsourcing by including other legacy aircraft fleets. This will enable us to focus more on high-tech areas like engine and components repair.

What are some of the future aims of Korean Air’s maintenance business?

We will keep focusing on heavy maintenance capability for new aircraft fleets to support our own aircraft operation and to maintain dispatch reliability at a higher level. Also, technology-intensive areas such as engine and aircraft parts will be further enhanced.  We will not only proactively explore areas for business cooperation with capable players such as OEMs, airlines and MROs but also continuously search for possible process innovation utilizing IT and big data technologies. 

 

Korean Air at a Glance

Headquarters: Seoul, South Korea

Founding: Founded by the South Korean government in 1962 as Korean Air Lines to replace Korean National Airlines. The carrier became Korean Air in 1984.

Hubs: Incheon International Airport, Gimpo International Airport

Destinations: 127 worldwide

Fleet: Korean Air’s commercial fleet totals more than 130 aircraft comprising Boeing and Airbus widebodies and narrowbodies and, since December 2017, Bombardier CS300s. The greatest numbers of widebodies in the fleet are Airbus A330-300s and Boeing 777-300ERs, with 21 of each. While operating a number of 737s, Korean Air is expecting to welcome more narrowbody aircraft over the next few years, with the Boeing 737 MAX 8 and Airbus A321neo expected to start entering the fleet in 2019.

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