Korean Air targets strong growth in aerospace business revenue

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Korean Air's aerospace division (KAL-ASD) is targeting its revenue to hit $1 billion by 2018.

In a presentation on the sidelines of the delivery of its 1000th sharklet to Airbus, the unit says its revenue has been growing at an annual average of 25% over the last five years. Last year, its revenue hit $698 million, and the aim is to grow the figure to $803 million this year.

J.H. Kim, KAL-ASD's marketing & contract departments managing vice president, says a ramp up of existing programmes such as the Airbus A320 and A350, as well as systems upgrades on defense programmes such as the Lockheed Martin P-3 Orion and also UAV upgrade works, should form the baseline for the unit to achieve its $1 billion target,

KAL-ASD produces about 45 shipsets of A320 sharklets monthly, and has the capability to increase the figure to 70 shipsets when needed. On the A350 programme, it produces the bulk cargo door, aft cargo door and forward cargo door. It produces three shipsets of cargo doors a month, and expects production to hit 13 shipsets per month in 2019.

KAL-ASD is also planning an expansion of its Tech Centre in Busan, which sits on 7.6 million sq ft of land near the Gimhae International Airport. Kim says the expansion will add about 2.5 million sq ft and that construction should start sometime in 2017, to be completed by 2020.

"The expanded space will be used for a major structural assembly line, and also a UAV final assembly line," he adds.

Though KAL-ASD does commercial and military aircraft manufacturing in addition to MRO work, 70% of its workload comes from commercial aircraft structure manufacturing, says Kim. Defense and UAV work make up the remaining 30% of its portfolio.

The Korean manufacturer is a major supplier to both Airbus and Boeing. Its workshare on Boeing aircraft includes manufacturing six structures on the 787, as well as the 737 Max winglet.

Kim adds that increasingly the aim is for KAL-ASD to move up the supply chain and be more involved in design and development work, rather than just manufacturing.