Kim Dong-kwan, vice chairman of Hanwha Group, is seeing results from the maintenance, repair, and overhaul (MRO) business for military aircraft and ships that he has earmarked as a future source of revenue. He secured three MRO contracts for U.S. Navy ships from last year to this year, and the possibility of securing MRO contracts for the engines of the U.S. military's large transport helicopter, CH-47 Chinook, has been mentioned. MRO is a high-value-added business that goes beyond simple maintenance and repairs to enhance performance, and it is a venture Kim is greatly invested in.
According to the defense industry on the 23rd, South Korea and the U.S. held the 57th South Korea-U.S. Logistics Cooperation Committee meeting in Seoul on the 22nd, selecting the Chinook engine as a pilot MRO project involving South Korean defense corporations. Until now, participation by South Korean corporations in the U.S. military aircraft MRO market has been restricted by the U.S. International Traffic in Arms Regulations (ITAR), a legal mechanism controlling the overseas transfer of U.S. weapons and technology.
With this decision, the T55 engine MRO for Chinook helicopters operated by the U.S. military in the Indo-Pacific region can now be conducted in South Korea. Until now, helicopter engines had to be sent to the U.S. or Japan for maintenance, which was costly and time-consuming. Although there is little information about the Chinook, it is reported that around 1,200 units have been produced so far.
The Ministry of National Defense plans to pursue a pilot MRO project through contracts with private corporations in the future. Currently, the only corporation in South Korea with the technology and infrastructure for military aircraft engine MRO is Hanwha Aerospace.
Hanwha Aerospace has conducted MRO on over 5,700 aircraft engines for 46 years, including the T55 series engines. The U.S. side also visited the domestic business sites of Hanwha Aerospace, Korean Air, and Korea Aerospace Industries (KAI) earlier this year to verify the MRO capabilities of South Korean corporations.
Hanwha Aerospace's Changwon plant holds various international certifications related to aircraft engines, including certification from the U.S. Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA). With the expansion of MRO volumes, a smart engine maintenance factory of about 16,500 square meters (approximately 5,000 pyeong) is also being built.
Following the helicopters, Hanwha Aerospace is also pushing for participation in the U.S. military fighter MRO.
The F414 engine produced under licensed technology from U.S. GE by Hanwha Aerospace will be mounted on the KF-21 as well as on the U.S. military's F/A-18E/F Super Hornet. Since the same engine is used in both countries' fighter jets, opportunities for the U.S. military fighter MRO business are also opening up.
According to global market research firm Modor Intelligence, the global military aircraft MRO market is expected to grow from $42.49 billion (about 59 trillion won) this year to $48.81 billion (about 68 trillion won) by 2030. The MRO market for ships is also projected to grow to 87 trillion won by 2029.
After signing a maintenance agreement (MSRA) with the U.S. Navy last July, Hanwha Ocean secured the overhaul for the USNS Wally Shirra a month later. Wally Shirra underwent MRO work for about six months before being delivered to the U.S. military.
In November last year, it secured a regular maintenance project for the U.S. Navy's replenishment ship, USNS Yukon, and at the beginning of this month, it won a maintenance project for the U.S. Navy's logistics support ship, Charles Drew.
A Hanwha official said, "Senior officials from the U.S. military visited Hanwha Aerospace in Changwon and Hanwha Ocean's business sites in Geoje, carefully inspecting the facilities. In the case of Geoje, I understand that Vice Chairman Kim accompanied them personally, emphasizing the importance of the MRO business."