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Country Profile South Korea

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Country Profile South Korea COUNTRY PROFILE SOUTH KOREA Yangyang Gimpo International Airport International Airport & Avjet Asia (FBO) Incheon Wonju Airport International Airport Seoul Cheongju International Airport Hanseo University Flight Education Center Pohang Airport Daegu Airport Ulsan Airport Sacheon Airport Muan Gwangju Airport Yeosu Airport Gimhae International Airport International Airport Domestic Airport International Airport Jeju International Airport Training Field 14 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 COUNTRY PROFILE: SOUTH KOREA SOUTH KOREA by Litalia Yoakum After transforming itself from one of the poorest economies in the world Business Jet Fleet — Size Category Breakdown to one of the richest in just one generation, South Korea has positioned itself as an economic powerhouse. Preparing to keep up with the country’s swift development is the business aviation industry ready to Large 1 (5%) Long Range 6 (27%) cater to South Korea’s corporations and growing industry. Medium 1 (4%) Home to more than 50 million people, South Korea inhabits the southern portion of the mountainous Korean Peninsula, bordered by the Sea of Very Light 3 (14%) Japan and the Yellow Sea. After World War II, which coincided with the end of the Japanese occupation, the southern portion of the peninsula was created into the now-known democratic government (Republic of Korea, ROC), while the northern portion installed a communist-style 22 government (Democratic People’s Republic of Korea, DPKR). Since its establishment under a democratic government, the country Light 5 (23%) Corp. Airliner 6 (27%) has thrived with innovation, manufacturing and technology becoming a competitive market with a highly-skilled workforce, opening the door for domestic and international business. Business Jet27 Fleet — OEM Breakdown +27231445+G Referred to as the “Miracle on the Han River”, for its rapid economic growth following the Korean War, South Korea now joins the ranks of the trillion-dollar club of world economies, an unofficial classification given to countries with a gross domestic product (GDP) of more than USD 1 Hawker 1 (4%) Cessna 8 (36%) trillion per year. As the fourth largest economy in Asia, Korea’s economy Airbus 1 (5%) is largely dominated by family-owned conglomerates (Chaebols) Bombardier 3 (14%) including the Samsung Group, Hyundai, LG Electronics and SK Group, though the country is now seeing the promotion of smaller enterprises and entrepreneurship and to break the Chaebol's grip on the economy. In coming years, South Korea’s government faces challenges due 22 to a high reliance on exports, which comprise about half of Korea’s GDP, as well as a rapidly aging population, growing inequality and an inflexible labor market. Boeing 5 (23%) Gulfstream 4 (18%) * Data Source: Asian 36Sky Group Fleet Report (Year-End 2016) +23181454+G While the country undergoes a period South Korea’s current turbulent political climate has caused widespread international attention, as the country’s first female president underwent of transformation impeachment over a corruption and influence-peddling scandal. An election for her replacement will take place 60 days from the March politically and 10th decision date for Korea’s Supreme Court to uphold or not her impeachment. Ongoing tension with the North has also left South Korea economically, several nervous, although the United States has affirmed its commitment to defend the country. industries are taking While the country undergoes a period of transformation politically and part in changes of economically, several industries are making changes of their own. In the business aviation sector, the country has the potential to expand further to cater to traffic brought on by the country’s vast business their own. opportunities. In 2018 the South Korean city of Pyeongchang will host the Winter Olympics, providing a prime opportunity for the country and the industry to illustrate this capacity to the world. FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 15 COUNTRY PROFILE: KOREA Business Jets — Top Operators by OEM 11 2 2 2 2 1 1 1 11+2 +2 +2 +2 +1 +1 +1 Total Center Korean Air Korean Corporation SK Telecom Hyundai Motor Star AeroSpace Star AeroSpace LG International International LG Flight Inspection Hanseo University Hanwha Chemical Hanwha Airbus 1 1 Boeing 2 2 1 5 Bombardier 2 1 3 Cessna 6 1 1 8 Gulfstream 1 2 1 4 Beechcraft 1 1 Total 11 2 2 2 2 1 1 1 22 Civil Helicopters — Top Operators by OEM 46 18 18 17 46+18+18+17+15+12+11+9+9+815 12 11 9 9 8 Total UI Helojet HeliKorea Fire Dept. Korean Air Korean Hongik Air Aero Peace Aero Coast Guard Forestry Dept. National Police Star Aerospace Airbus 4 8 1 4 7 8 3 35 Bell 9 2 7 9 2 2 1 2 34 KAI 2 2 Kamov 30 4 2 8 2 46 Leonardo 3 3 3 2 4 4 19 MD 2 1 1 4 Mil 3 7 10 Sikorsky 3 1 3 1 1 4 13 Total 46 18 18 17 15 12 11 9 9 8 163 % of the total Korean fleet 73% 16 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 COUNTRY PROFILE: SOUTH KOREA STATUS QUO Though a relatively small business aviation market, South Korea is actively Helicopter Fleet — Size Category Breakdown seeking to make a name for itself among the bigger markets in the Asia- Pacific region. Heavy 14 (6%) Medium 121 (54%) At year end 2016, there were 22 business jets based in South Korea, up from 19 in 2015. Long range jets and corporate airliners each hold 27% of the fleet, suggesting most use is over longer distances. However, the Light Twin 29 (13%) shorter-range Cessna models are still the most popular, with 36% of the market share in the country. Overall, the fleet is young, with the majority manufactured in the past decade. Single 59 (27%) Korean Air is the largest operator in the country by far (50% of the fleet), with 223 11 aircraft including two BBJs, two Global Express XRS’, six Cessnas and one G650. Samsung Group previously held the largest fleet in the country, but sold their entire fleet to Korean Air. Samsung is now exclusively using charter services provided by Korean Air. As far as jet charter, Aviation Business International Services Korea (ABIS.KOREA) explained that business jet charter services in Korea are 54+27136+G geared towards the large companies based in the country, however larger conglomerates including SK Group, Hyundai, Hanwha and LG Electronics Helicopter Fleet —OEM Breakdown have their own aircraft. 2016 also saw a new charter company join the market. Star Aerospace established a charter business with the purchase of a Cessna Citation 500. KAI 2 (1%) Enstrom 2 (1%) “Most business jet charter passengers are foreigners coming out of Korea, MD 8 (4%) not Korean residents,” says ABIS.KOREA. “However, the Seoul Gimpo Mil 12 Airbus 56 (25%) Business Aviation Center (SGBAC), the first business aviation terminal, (5%) opened in March 2016. It was developed by the Korea Airports Corporation. Leonardo 21 (9%) This will help to develop the business jet market, charter and business aviation within the country.” Sikorsky 27 (12%) 223 Helicopter Fleet — Mission Breakdown Bell 45 (20%) Kamov 50 (23%) Offshore 3 (1%) Charter 2 (1%) EMS 9 (4%) 25+2320129541+G Law Enforcement 15 (7%) Multi-Mission 154 (69%) At year end 2016, there Corporate 17 (8%) were 22 business jets SAR 23 (10%) based in South Korea, 223 up from 19 in 2015. Long range jets and corporate airliners each * Data Source: Asian69 Sky Group Fleet Report (Year-End 2016) +108741+G hold 27% of the fleet. FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 17 COUNTRY PROFILE: SOUTH KOREA At present, Taiwan’s economic, commercial, cultural, technological, agricultural and tourism are inseparable from China. INFRASTRUCTURE CHALLENGES military-operated airports require a 7-day notice. Air congestion often occurs at Incheon and Jeju and it is often difficult to secure slots for There are over a dozen airports in Korea, however only a few adequately overnight parking.” serve business aviation needs. These are Seoul’s Incheon International Airport and Gimpo International Airport, as well as Jeju International Korea’s business aviation industry could also be more successful Airport and Busan’s Gimhae International Airport. with a domestic aircraft management company. “There’s no aircraft management company in Korea,” says Son. “Therefore, a person or Although the fleet only saw minimal growth, 2016 was an important corporation needing a corporate jet or company commute, must year for the industry. establish their own aviation team. To operate an aircraft, they need at least 10 employees, including three pilots and it will cost at least $2.5M “Korea Airports Corporation (KAC), a government investment company, USD annually for employees alone. Once an aircraft management opened the first business jet dedicated facility on June 16 2016,” explains company is established, that company can manage the aircraft and Mr. Kyung Ho Kim, Ph.D from Korea Aerospace University and member the aviation team. More prospects would then be more willing to buy of the Korea Aerospace Policy Research Institute. “Operating 14 Airports jets, without having to worry about management, hiring employees and in Korea, KAC invested approximately 4.5M USD into the Seoul Gimpo aviation law.” Business Aviation Center (SGBAC). The facility was constructed by the Ministry of Land, Infrastructure, and Transport (MOLIT) and KAC to meet the needs of an increasing number of flights to Korea as well as ROTARY MARKET to develop the nation as the business aviation hub in northeast Asia. At year end 2016, the civil helicopter fleet stood at 223. This is significant It includes a VIP terminal which has available on-site CIQ clearance, growth from 2014, when the fleet was 206 and year end 2015 when the and a 10,260㎡-large hangar that can accommodate up to 10 G550, with fleet was 210.
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