Market Trends of South Korea Aerospace And Defense Industry
The Maintenance, Repair, and Overhaul Segment is Expected to Achieve Significant Market Growth
South Korea has witnessed an increase in the number of air passengers over the past few years. In FY 2023, domestic and foreign airlines made 539,788 flights over South Korea, up from 465,469 flights in 2021. The LCCs' growth has been at the expense of the market shares of Korean full-service carriers (FSC) and international carriers.
Due to the projected increase in passenger influx during the forecast period, major airlines like Air Busan, Air Premia, and Korean Air are investing significantly into bringing their grounded aircraft back to operation and making them airworthy to cater to the transport needs of both passengers and cargo across the country and for international travel. In November 2023, Pratt & Whitney announced that Korean Air had inducted its first GTF engine into its fleet. In March 2024, Korean Air Lines announced that the company would sign a contract with Airbus to procure 33 A350 wide-body jets in a deal valued at USD 13.7 billion as the airline seeks to strengthen its long-haul fleet while gradually retiring older aircraft.
South Korea has a robust military foundation with thousands of military aircraft in operation, which creates an annual demand of over USD 1 billion for MRO parties. In November 2023, the Defense Acquisition Program Administration (DAPA) and Boeing announced plans to work on improving South Korea's military MRO capabilities, including upgrade work. DAPA approved a program to modernize South Korea's existing F-15K fighter aircraft fleet and acquire additional ATC (Air-to-Air Tanker) aircraft. According to DAPA, the total cost of the modernization project for the F-15K was to amount to KRW 3.46 trillion (USD 2.72 billion) and was to take place from 2024 to 2034. DAPA said the purpose of the modernization was to increase the mission capability and survivability of the force's 59 F-15 Ks.
The Space Segment is Projected to Witness Significant Growth During the Forecast Period
The South Korean satellite manufacturing industry has rapidly grown in recent years, with the country emerging as a significant player in the global space sector. In FY 2023, South Korea had planned to spend USD 674 million on space programs. One of the key drivers of South Korea's satellite industry is the Korea Aerospace Research Institute (KARI), which is the country's primary government agency responsible for the research, development, and production of satellites. KARI has played a crucial role in the development of various satellite applications.
South Korea has also invested heavily in research and development (R&D) to enhance its satellite manufacturing capabilities. The country's satellite manufacturers have focused on developing advanced technologies such as high-resolution imaging, remote sensing, and satellite communication systems. Some of the notable launches by the country were in August 2022, when South Korea's KARI manufactured and launched its lunar orbiter Danuri to survey lunar resources such as water ice, uranium, helium-3, silicon, and aluminum. It is also expected to produce a topographic map to help select future lunar landing sites.
The South Korean satellite manufacturing industry has made significant progress in recent years. It is expected to continue its growth trajectory, contributing to the country's advancements in space technology and applications due to increasing space budgets.
