Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
INTERVIEW 'Sharp Aviation K offers dedicated, reliable services for multinational carriers'
Sharp Aviation K President & CEO Paik Soon-suk speaks during an interview with The Korea Times at the company's headquarters in Jongno-gu, Seoul, Nov. 28. / Korea Times photo by Shim Hyun-chul
By Nam Hyun-woo
Airport service firm begins aircraft heavy maintenance for 3 LCCs
By Nam Hyun-woo
Air travel requires more logistical services than one may think. First, passengers need a carrier, which operates a plane you fly with, and then other service providers come next.
They take care of aircraft maintenance work including fueling, cleaning, deicing, check-in, cargo handling, in-flight meals and other groundwork, necessary to ensure passenger safety and comfort.
For these services, Korea's two full service carriers, Korean Air and Asiana Airlines, each run their own service firms -- Korea Airport Service and Asiana Airport, respectively -- but foreign carriers frequenting the country's airports and other domestic low cost carriers (LCCs) have to hire an outsourced service provider.
And this is why Sharp Aviation K CEO Paik Soon-suk expanded his business to a “total aviation service firm,” covering all segments of services surrounding a flight.
“Air carriers want dedicated services in whichever airport they are in. Since we are not tied to a certain carrier, we can be a dedicated specialist for each of them, offering catered services,” Paik said during an interview with The Korea Times, Nov. 28.
“As long as Korea stays attractive to foreign visitors, the number of overseas carriers advancing to the country is bound to grow and our business outlook will also stay positive.”
Sharp Aviation K was established in 1964 as an online and offline general sales agent (GSA) for foreign airlines, representing their sales in Korea. Since hiring such a GSA costs lower than opening their own offices, careers usually use GSAs in countries in which they do not have a team or an office.
Despite having a stable status as a GSA for more than five decades, the company opted to venture into the untapped business area 15 years ago in a belief that the number of carriers operating to and from Korea would grow exponentially.
Since then, the company has been spending accumulated 150 billion won ($134 million) to incorporate other aviation service domains.
“Back then, people raised questions about the sustainability of LCCs, but no one doubts about that these days,” Paik said. “As the market grows, our airport service has become a unique business model in Korea. These days, revenues from airport service business is greater than that of our GSA business.”
Currently, Sharp Aviation K's domain is ranging from passenger handling, ramp and cargo handling, cargo terminal & warehouse operating, aircraft fueling, in-flight catering at Incheon Airport and aircraft maintenance, repair and overhaul.
It provides services at seven airports in Korea -- Gimpo, Incheon, Gunsan, Jeju, Gimhae, Daegu and Cheongju -- currently and will add two more local airports in Yangyang, Gangwon Province, and Muan, South Jeolla Province, next year. At those airports, the company serves 5 million passengers and 140,000 tons of cargo a year.
It provide services for more than 30 carriers and logistics firms, including big names such as United Airlines, Delta Air Lines, Air France, British Airways, Emirates, KLM, Finnair, DHL and so on.
“Approximately 100 foreign carriers operate to Korea and Korea has seven to eight LCCs, meaning we are targeting 110 firms,” Paik said. “We are proud of our 15 percent market share because we started from the scratch without any helps from foreign companies.”
Since Korean Air is a member of SkyTeam Airline Alliance and Asiana Airline is a Star Alliance, Paik said Sharp Aviation K is mainly targeting members of One Alliance, one of the top 3 airline alliances in the world, though the company has contracts with some SkyTeam and Star Alliance members.
“It is very important that we are expanding. The demand for our service is growing far faster than that of our capacity,” he said. “Also, there are LCCs and cargo planes which will also ramp up demands for us.”
He stressed that Sharp Aviation K has its strength in costs, while providing the same quality services that its domestic rivals can offer.
“It took more than 15 years for us to reach our current level of service,” he said. “We are confident in our ability to compete with Korean Air or Asiana Airlines in terms of quality in every segment of airport services, while our team is more agile and nimble, having absolutely low expenses.”
Another point he underscored is dedication to each client. Since Korean Air and Asiana Airlines have their own aircrafts, 172 and 82, respectively, their priority has to be on their own planes, while Sharp Aviation K can send its team to each clients and have the team educated there, so that it can be “a specialist” for the carrier, he said.
“Unless there is a special reason, it will be a good option for foreign carriers,” he said. “They can expect the same as what their own employees do from our team. Also, it is a great advantage that they can sign just one contract for airport services in Korea, because we provide a full range of ground work.”
Sharp Aviation K employees check a T'way Air aircraft at a hangar at the Incheon International Airport, on Dec. 7. / Courtesy of Sharp Aviation K
New era of maintenance
On Dec. 6, Sharp Aviation K had a big moment in its history, becoming the first non-carrier maintenance company to perform a heavy aircraft check in Korea.
Aircraft operators have to conduct periodic checks to their planes at either their own facilities or lesser-designated maintenance company. Depending on the seriousness of the checks, there are A-check, B-check, C-check and D-check. A and B are lighter checks for shorter periods, and C and D are heavier checks.
So far, non-affiliated Korean LCCs, such as Jeju Air, Eastar Jet and T'way Air, had to rely on foreign maintenance companies for heavy checks because Asiana Airlines does not have Boeing 737s, which are the LCCs' main aircraft, in its fleet currently, while Korean Air, which has 34 B737s, do not provide services to them.
“Thus, they had to send their aircraft to foreign companies in Mongolia, Indonesia and Hong Kong, shouldering huge costs,” Paik said.
To address that, Sharp Aviation K and the three LCCs set up a joint venture which has a hangar at Incheon International Airport, conducting C-checks.
A T'way Air aircraft entered the hangar for a C-check Dec. 6, marking the first time a non-carrier maintenance company conducted maintenance here.
“It is a meaningful moment which came after 20 years of effort,” Paik said. Starting from that plane, T'way is scheduled to put 16 planes next year and two others will also place similar number of aircraft for the check.
“To think about our future, we want to become an airport service brand which operates in not only Korean but also overseas airports in emerging markets” he said.
“I expect more full service carrier will outsource their airport services to a third party because of rising costs. And that will determine our future,” Paik said, adding the company plans to go public in the near future.