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KAI presents MRO business plan to gov't

All News 17:22 July 21, 2016

CHANGWON, South Korea, July 21 (Yonhap) -- South Korea's sole aircraft manufacturer, Korea Aerospace Industries Ltd. (KAI), said Thursday that it has submitted to the land and transport ministry its business plan for aircraft maintenance, repair and overhaul (MRO) after about 18 months of preparation.

The submission, the first of its kind, was made the previous day after the ministry announced a plan in January last year to nurture the MRO industry by providing tailored support for the launch of an MRO consortium, including an airline, and the creation of an MRO complex.

The ministry didn't fix the deadline for the submission of MRO business plans at that time, and KAI is the sole presenter.

KAI, based in Sacheon, 437 kilometers southeast of Seoul, wrote up the business plan jointly with the city and South Gyeongsang provincial governments.

The plan has yet to be made public for the ministry's review, but reportedly contains an initiative to form an MRO park on a 30,000-square-meter lot in the city in the first stage.

In addition, the complex is expected to be expanded to some 300,000 square meters in the long run, with major MRO items to include fuselage, hydraulic system and landing gears.

To that end, KAI will reportedly invest 510 billion won (US$446.46 million) in the project, plus 90 billion won from the city and provincial government and 100 billion won from the central government.

"The ministry is expected to conduct a preliminary feasibility study on our (KAI) business plan in the latter half of this year via a screening panel," a KAI official said.

For now, KAI seems to be in a more advantageous position than Asiana Airlines, the country's smaller airline, which is known to have been preparing an MRO business plan, but has been putting off its presentation due to profit aggravation.

"No companies other than KAI have presented their business plan," the official said.

"On top of that, since South Gyeongsang Province is a government-designated aviation industrial complex, we're in a better position (to win the government project)," the official said.
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