Incheon Airport Attracts Aviation MRO Business with Cumulative Export Value of 1 Trillion Won

A passenger plane being converted into a cargo plane at IAI's maintenance facility located at Ben Gurion Airport in Israel.

[Asia Economy Reporter Dongwoo Lee] Incheon Airport has been selected as the first overseas production base of Israel Aerospace Industries (IAI), a global cargo aircraft modification specialist. The total export value through Incheon Airport's cargo aircraft modification facility is expected to reach 1 trillion KRW cumulatively by 2040.

Incheon International Airport Corporation announced on the 4th that it signed a Memorandum of Agreement (MOA) for investment attraction in the cargo aircraft modification business at Incheon Airport with IAI, an Israeli state-owned company, and Sharp Technics K, a domestic aircraft maintenance and modification (MRO) specialist, at the Paradise City Hotel in Jung-gu, Incheon.

According to the MOA, each company plans to establish a cargo aircraft modification facility at Incheon Airport, start initial production of B777-300ER modified cargo aircraft from 2024, and then expand further into heavy maintenance business for large cargo aircraft.

Incheon International Airport Corporation will be responsible for infrastructure construction such as site development and hangar construction for project execution, while IAI and Sharp Technics K will proceed with establishing a limited joint venture and technology transfer.

The cargo aircraft modified at the Incheon Airport cargo aircraft modification facility will be entirely exported overseas to air express companies and others. Incheon Airport Corporation expects that after the first shipment of modified aircraft, exports will reach 1 trillion KRW by 2040, creating approximately 600 direct jobs and 1,500 indirect jobs through the cargo aircraft modification facility, totaling about 2,100 new jobs.

In particular, by transferring the highest-level cargo aircraft modification technology in the aircraft maintenance industry to domestic companies, it is expected to greatly contribute to securing the international competitiveness of Korea's aviation MRO industry in the future. Domestic aircraft parts manufacturers, such as those in Sacheon, Gyeongsangnam-do, responsible for aircraft parts production, are also expected to open a path for mutual growth.

To attract this investment, Incheon International Airport Corporation has been actively marketing to IAI since 2019 and was selected after fierce competition with strong candidate sites such as China, Mexico, and India.

The Incheon Airport cargo aircraft modification facility is expected to secure stable volume due to the recent surge in air cargo demand. Last year, global air cargo sales reached $110.8 billion (approximately 112 trillion KRW), a 24.5% increase from the previous year, and it is predicted that modified cargo aircraft will account for more than 60% of the cargo aircraft market demand over the next 20 years.

Based on attracting this cargo aircraft modification production base, Incheon International Airport Corporation plans to create a global competitive aviation MRO cluster at Incheon Airport capable of providing integrated one-stop maintenance services. This aims to generate synergy effects through win-win development with the domestic aviation MRO industry, strengthen the competitiveness of the domestic aviation industry, and contribute to national and regional economic development.

Kim Kyung-wook, President of Incheon International Airport Corporation, said, "Based on Incheon Airport's world-class air transport infrastructure, we plan to continuously attract global aviation MRO companies and promote mutual growth with the domestic aviation MRO industry to contribute to strengthening the competitiveness of Korea's aviation industry."

This content was produced with the assistance of AI translation services.