Comparative Analysis of the Aviation Maintenance, Repair, and Overhaul (MRO) Industry in Northeast Asian Countries: A Suggestion for the Development of Korea’s MRO Industry

Abstract

Aviation maintenance, repair, and overhaul (MRO) has become more important to the air transport industry during the pandemic since it plays a crucial role in improving safety, ensuring profitability, and achieving sustainability in the industry. The growth of the Northeast Asian MRO market is forecasted to be remarkable, making the region the next MRO powerhouse. This study investigates the MRO industry in Northeast Asian countries (China, Japan, and Korea) to gain insights for strategical development of the industry. SWOT analysis was used to understand external macro-environment and internal conditions comprehensively, with comparative analysis then performed to find each country’s competitiveness. SWOT analysis of the external environment of the aviation MRO industry in Northeast Asia finds opportunities from increased competition in the air transport industry and technological development and threats caused by aircraft advancements (less scheduled maintenance checks) and a limited workforce. Internal conditions are analyzed using six factors: cost, workforce, geographic presence, quality with shorter turnaround time, technological advancement, and certification. The results indicate that Korea’s MRO industry has strong human resources but weak technological capabilities. The competitive advantage of the Chinese MRO industry stems from both a large number of aircraft and lower costs. While Japan possesses superior MRO technology, high labor costs reduce their industrial competitiveness. Based on a comparative analysis, this study provides strategic insights into the improvements that can be made in the Korean MRO industry. Since composite MRO of newer aircraft presents a small technological gap which can be overcome with high-quality human resources, Korea should focus its resources and policies on promoting the composite MRO industry due to its high growth potential.