KAI Aims to Earn 20 Tril. Won in Sales by 2030
Korea Aerospace Industries Ltd. (KAI) is planning to develop a new mid-size civilian airplane with less than 100 seats in consideration of the rapid growth in civilian aircraft market in Northeast Asia.
The plan was disclosed by KAI CEO Kim Jo-won who held a press conference under the theme of “aerospace industry development strategy” at the Air Force Hall in Seoul on Jan. 17.
“KAI will secure new growth engines by developing new civilian airplanes and future unmanned aerial vehicles. We will increase the size of the country's aerospace market to 20 trillion won (US$17.79 billion) by 2030 and nurture some 1,000 small but competitive aerospace companies,” Kim said.
KAI was established in 1999 as South Korea’s sole military aircraft supplier. In recent years, however, the company has increased the proportion of its civilian business. In 2018, civilian aircraft parts accounted for 62 percent, or 1.80 trillion won (US$1.60 billion), of the 2.9 trillion won (US$2.58 billion) orders it received.
Kim officially announced that KAI would focus more on the civilian side of its business, which is expected to grow at a rapid pace amid economic growth and increased trade, rather than the defense side, which is forecast to face growth stagnation.
He said, “When North Korea and three provinces in northeastern China are opened following an improvement in inter-Korean relations, demand for logistics will surge. For instance, tour programs to Mount Paektu alone will require 50,000 residing employees. As a result, demand for aircraft for travel and freight traffic will spike. Now is a good time to launch new aircraft which has received approval from the United States. We are trying to persuade related agencies.”
Kim disclosed his plans to develop a new civilian airplane in consideration of the growth trend of the private aircraft market in the Northeast Asian region. He said, “We will jointly develop new core technologies for the planned aircraft through joint research with partner companies. We will draw up more detailed plans to develop a mid-size airplane with less than 100 seats which is fit for the Korean peninsula and Asia.”
In addition, KAI is seeking to become a "super tier 1" enterprise in aircraft body manufacturing by focusing on strategic order items.
Meanwhile, KAI said that it has normalized its operations by reforming management systems, resuming the mass production of the Surion and expanding new orders. The company’s order backlog amounted to 19 trillion won (US$16.90 billion) last year.