“To maintain our position we must constantly innovate and strengthen our partnerships” Yanghyun Jeong, KAI

10 de November de 2023

In this interview conducted by Global Industry. Yanghyun Jeong, Director of Material Procurement at Korea Aerospace Industries (KAI) talks about the present and future of the sector in Asia and its links with Europe. 

What is Korea Aerospace Industries’ core business and what is its market share in the country?

Korea Aerospace Industries is a leading aerospace and defence company in South Korea. It was founded in 1999 by the merger of three aerospace companies (Samsung, Hyundai and Daewoo). Its core segment is aeronautical R&D, production and maintenance.

Our five business areas are fixed-wing aircraft, rotary-wing aircraft, aerostructures and equipment maintenance. In terms of market weight, KAI has a 90% share. As a major player in the aerospace and defence industry, our company plays a crucial role in driving technological advances and supporting South Korea’s national security.

What are the main economic and commercial dimensions of your company?

Korea Aerospace Industries (KAI) has achieved very significant economic and commercial figures.. The company has experienced sustained revenue growth in excess of $3 billion annually. Around 50% of this comes from our fixed-wing aircraft segment. This financial performance underscores our ability to deliver high quality aerospace products and meet the demands of our customers. In addition, we have successfully expanded into markets around the world.

Recently, we signed a contract with Poland for the shipment of 48 FA-50 fighter jets worth $3 billion. This highlights our ability to compete globally and contribute to South Korea’s export economy. Finally, KAI is strongly committed to research and development in the aerospace industry. This investment allows us to develop state-of-the-art systems and components that ensure the competitiveness of our products.

What is your strategy in terms of internationalisation?

Our international strategy revolves around expanding our global footprint and being present in all major markets. In this regard, we seek to collaborate with international aerospace companies, governments and defence agencies.

And what are your main markets?

As our main production is the T-50, which we developed with Lockheed Martin in 2002, our international policy was based in the US in the period 2000-2010. From that year onwards, as sales grew, we cemented a strong relationship with Airbus. As a result, We are involved in the production of the A320 and A350 models and currently have two offices in Europe and four in the Americas. In addition, we put a lot of emphasis on diversification.. Therefore, while maintaining our presence in South Korea, we have expanded into other regions such as Poland, Indonesia, Malaysia, the Philippines, Peru, Iraq, etc.

In your opinion, what are the differences between the Asian and European aerospace industry?

Europe has a long tradition in the aerospace industry. It is home to renowned manufacturers, with a well-established infrastructure and long-standing expertise in innovation.

European industry has traditionally been at the forefront of the sector, driving advances in areas such as design, engine production and electronics. In addition, Europe has an established and diversified market, with leading players such as Airbus, Safran and Leonardo. The presence of these giants contributes to the continent’s reputation as a centre for aerospace development.

On the other hand, Asian countries have witnessed significant growth and development over the decades. Countries such as China, Japan and South Korea have rapidly expanded their capabilities and have made remarkable advances in aircraft manufacturing, avionics and satellite technology.. In Asia, there has been rapid growth in technological expertise, collaboration with international partners and investment in cutting-edge projects.. However, the sector as a whole relies on collaboration. The aviation chain involves all continents and companies work together to deliver safe, innovative and reliable products to the public.

What are the future challenges facing your company?

There are a number of challenges that will shape our strategic directions. These include Urban Air Mobility, which presents both opportunities and challenges. The development of eVTOL aircraft for urban transport requires breakthroughs in the field of battery development, autonomous flight systems and infrastructure integration. KAI is adapting to meet this emerging market, ensuring that aircraft comply with the safety requirements of the law. On the other hand, satellite technology is expanding, driven by growing demands for connectivity, earth observation and space exploration.

We are addressing this phenomenon by developing communication systems, remote sensing capabilities, satellite integration and launch services. Ensuring cost-effective solutions, trust and compatibility with international standards will be key to addressing these market dynamics. In addition, the aerospace industry is highly competitive and KAI faces challenges arising from the presence of established and emerging global players. To maintain our position we must constantly innovate and strengthen our partnerships. In addition, geopolitics and regulatory frameworks can affect market dynamics, forcing us to adapt to a changing international landscape.

Why did you decide to participate in Mindtech 2023? What attracted you most to the event?

The forum provided a unique platform for industry leaders and experts in the field to meet. We were able to discuss the latest developments and trends in the aerospace sector. Our aim was to forge meaningful relationships and explore opportunities for collaboration. On the other hand, Mindtech allowed us to keep abreast of the latest trends and best practices in the aviation industry. This knowledge will enable us to improve our strategies and align our business with industry developments.