KAI Signs 3rd PBL Contract for T-50 Series Aircraft Worth 180 Billion KRW

Goal to Expand Annual Sales to 1 Trillion KRW in Military and Civil MRO Business

T-50 Advanced Trainer Aircraft

[Asia Economy Reporter Dongwoo Lee] Korea Aerospace Industries (KAI) announced on the 15th that it has signed a performance-based logistics (PBL) contract with the Defense Acquisition Program Administration for the T-50 series aircraft. PBL is a military maintenance, repair, and overhaul (MRO) contract method in which a specialized company is responsible for logistics support of contracted items and receives performance bonuses or penalties based on achievement of results.

Under this contract, KAI will perform various tasks including acquisition, transportation, and delivery management based on demand forecasting for approximately 4,000 repair parts of the T-50 series aircraft. The contract period is from December 2021 to July 2025, lasting 3 years and 7 months, with a scale of 180 billion KRW.

Since starting with the KT/A-1 in 2010, KAI has been steadily carrying out PBL projects for domestic aircraft such as the T-50 series, corps-level UAVs, and the Surion series. Through the PBL project, KAI quickly identifies and resolves various issues arising during follow-up support, contributing to shortening military maintenance lead times, improving aircraft availability rates, and reducing operational and maintenance costs.

KAI plans to grow PBL projects, including MRO, into a core business group based on the manufacturer's technology and follow-up support know-how. Aircraft are typically operated for more than 30 years, and when viewing the entire aircraft lifecycle as 100, development and mass production account for 30 to 40, while follow-up operational support forms a larger market of 60 to 70.

To date, KAI has conducted PBL projects for 8 types of aircraft worth approximately 900 billion KRW, and expects continuous business expansion as the types of domestic aircraft such as the KF-21 and LAH increase. Based on repair parts demand and operational data secured through domestic PBL projects, KAI plans to strengthen follow-up support service businesses for export target countries, thereby creating added value and enhancing the export competitiveness of domestic aircraft.

In particular, through cooperation with the MRO specialist company KAEMS, KAI aims to increase the current MRO business, which has annual sales of about 200 billion KRW, to 1 trillion KRW by 2030 by expanding military aircraft performance upgrades and civil aircraft maintenance volumes.

A KAI official said, “The core of the PBL project is accurate demand forecasting and prompt support through cooperation with the demand units,” adding, “We will strive to improve military capabilities and strengthen the competitiveness of domestic aircraft through timely support.”

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