In a much-needed confidence amid a series of procurement-related scandals, South Korea’s largest defense company Korea Aerospace Industries Ltd. (KAI) won a contract worth $48.8 million from the U.S. for maintenance on 90 F-16 fighter jets.

The nation’s sole aircraft maker will offer maintenance, repair and overhaul (MRO) services for the F-16 fleet of the U.S. Air Force from Tuesday to September 2022. It is the third order that KAI has received so far from the U.S., following one for refurbishment work to extend life of F-16s in 2006 and the other for maintenance of H-53 helicopters in 2010.

The MRO business requires advanced technical and quality control skills that KAI has built from its years of experience with various military jets including its indigenous advanced jet trainer T-50 and basic trainer KT-1 as well as U.S. maritime patrol aircraft P-3.

“We beat global rivals in a fierce competition,” said an official from KAI.

Shares of KAI closed Wednesday at 57,000 won, up 0.35 percent from the previous session.

KAI is working on a project to build an MRO complex commanding an area of 310,000 square meters near its headquarters in Sacheon, South Gyeongsang Province, with an investment of 700 billion won ($626 million). “With our hard-won expertise in aircraft development and manufacturing, we aim to nurture the MRO business as our future growth engine by expanding the business into commercial aircrafts,” the company said.

The Sacheon MRO complex would help domestic low-cost carriers (LCC) that get the repair work done in other countries to save cost and raise their business stability. The domestic MRO market is projected to grow from current 3.5 trillion won - 2 trillion won for military and 1.5 trillion won for commercial aircrafts - to 4.2 trillion won by 2020, according to the Korea Institute for Industrial Economics & Trade.

By Kim Jung-hwan and Choi Mira

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