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Biz News Korea(Eng)
Asiana Airlines withdraws Cheongju MRO business project
- Collected
- 2016.08.30
- Distributed
- 2016.09.01
- Source
- Go Direct
The country’s second biggest passenger carrier said on Monday that it decided to give up its plan to build an MRO facility as its preliminary review over the last year and a half concluded that the business lacked feasibility.
The air carrier has reviewed the project to establish an MRO complex in Cheongju, some 130 kilometers south of Seoul, since the Ministry of Land, Infrastructure, and Transportation announced its plan to foster home-grown MRO business operators in January last year. However since its parent company Kumho Asiana Group’s Chairman Park Sam-koo ordered a re-examination of the project in July last year, speculation has been circulating that it might take its hands off of the project.
“Asiana Airlines seemed to have given up on the business due to the high financial burden and low profitability,” an unnamed official from the aviation industry said, adding that a successful MRO business requires advanced technology and low labor costs, but Korea is still lagging behind in technical skills and labor cost is higher than that of emerging countries.
With Asiana Airlines out of the race, the odds of Korea Aerospace Industries (KAI) winning the project have become greater. KAI and Sacheon city in South Gyeongsang Province jointly submitted a business proposal to the Ministry of Land last month to build an MRO facility in the city. The decision whether to award the project to KAI and Sacheon city will be made by next month by the ministry.
By Kim Jung-hwan and Chun jung-hong
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]