Korea to bulk up airlines maintenance sector

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki presides a regular meeting of government's Central Economic Response Headquarters at the Government Complex Seoul in downtown Seoul, Thursday. Yonhap

By Yi Whan-woo

The government will help reduce foreign reliance in commercial airline maintenance, repair and overhaul as part of efforts to nurture the country's next growth engines, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said Thursday.

The country's top economic policy maker said the government will push to cut the rate of such reliance to 30 percent or below by 2025, and in return, expand the value of the domestic maintenance market to 5 trillion won ($4.31 billion) by 2030.

"The MRO is an extremely high value-added industry that can spur growth in related sectors," he said at a regular meeting on the government's response to urgent economic issues at the Government Complex Seoul. "Unfortunately, we rely on more than half of MRO from abroad and the technology gap with competing nations is very wide."

According to the latest government data, Korea's foreign reliance was 56 percent in 2020, while its maintenance market size was 700 billion won.

It lagged far behind the world's dominant players, such as the United States that was fully self-sufficient in maintenance-related technology.

France had a self-sufficiency rate of 94 percent, Japan 85 percent and China 80 percent.

To enhance global competiveness, Hong promised to exempt international commercial airliners from paying airport charges if they use maintenance services here and to remove tariffs on aviation equipment.

The MRO sector is growing rapidly worldwide despite the COVID-19 pandemic and resultant international travel restrictions.

The International Air Transport Association (IATA) said on its website that the maintenance aftermarket material spending for 2020 came to around $26 billion.

It also said used service materials for planes are set to grow by 68 percent in 2022.

Meanwhile, Hong said the amount of air cargo operated by flagship carriers to the U.S. will be increased to 3,300 in the second half. He did not specify further details.

Regarding maritime freight to the U.S. and Southeast Asia, up to 13 additional carriers will be put into operation temporarily.

The government will offer marine shipping companies an incentive of 20,000 won per container shipped if their total number of shipments increases.

Among other topics covered during the meeting were measures to reduce burdens of the plants hit by a price surge in raw materials, an emergency loan worth 100 billion won and a separate 30 billion won to be spent to facilitate exports.

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