The South Korean government is attempting to lure independent MRO operators to establish facilities in this country, and is also launching an effort to set up a maintenance safety database amongst Korean carriers.
The government views expanding MRO capability as an important objective, said Yeun Jeung, president of the Korea Institute of Aviation Safety Technology (KIAST), at Aviation Week's MRO East Asia conference. The fast-growing LCC sector is a particular focus, Jeung said. The government is offering a range of financial incentives to encourage major MRO companies to enter joint ventures in Korea.
Foreign ownership limits for MRO businesses were removed in 2015, but the initiative has yet to result in new development by overseas players. Another goal has been to establish more MRO operations in Korean regional centres. The government's approach to its MRO objectives may be revised if a new administration emerges this year following a period of political upheaval.
Korea's MRO market is worth about $1.5 billion a year. While this represents the third-largest MRO market in Asia-Pacific, behind only China and Japan, there are no major independent MRO operations in Korea, Jeung said.
The country's nine national carriers conduct their own line maintenance in Korea, but a large proportion of heavy maintenance and almost all engine work is outsourced overseas. Korean Air conducts its own heavy maintenance, while most of Asiana's is outsourced. The seven LCCs generally have their heavy checks performed overseas.
There will soon be another facility in Korea, with four LCCs establishing a joint venture maintenance hangar at Seoul's Incheon International Airport. This will have capacity for two narrowbody aircraft at once, and is expected to begin operations this year. However, efforts to develop new civil MRO bases in two regional cities have stalled. One of these was to be in Cheongju (Aviation Daily, Dec. 16).
Meanwhile, the government is also interested in improving MRO safety through data collection and sharing. Transportation officials recently held a meeting with the maintenance heads of the nine carriers, Jeung said. As a result of this meeting, KIAST has been tasked with developing proposals for data sharing.
Jeung noted that competition would not be compromised by the pooling of safety information. Such an approach would be particularly useful for Korea's LCCs, as most operate the same type of aircraft -- Boeing 737-800s. Jeung said KIAST is researching required next steps for this process. Aircraft manufacturers will also be invited to participate.
The collective fleet of South Korea's airlines reached 349 aircraft in 2016, Jeung said. This was almost double the total from 2006. Annual flight numbers also increased at about the same rate to 465,000.
While full-service airline fleets grew by an annual average of 6.4%, the LCCs' annual increase was 42.6%. The two largest carriers -- Korean Air and Asiana -- accounted for 98% of the overall fleet in 2006, but now their share has dropped to 68% due to the rise of the LCCs.