Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 4.18 Billion |
| Market Size (2030) | USD 4.71 Billion |
| Growth Rate (2025 - 2030) | 2.42% CAGR |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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South Korea Aviation Market Analysis by Mordor Intelligence
The South Korea aviation market size stood at USD 4.18 billion in 2025 and is forecast to reach USD 4.71 billion by 2030, expanding at a 2.42% CAGR despite persistent slot congestion at Incheon and Gimpo hubs. Growth is largely driven by Korean Air’s USD 50 billion fleet renewal, the recovery of international passenger flows, and the steady ramp-up of indigenous defense programs. Military modernization, airport digitalization, and emerging sustainable fuel regulations shape a market environment where commercial carriers seek efficiency gains while defense agencies accelerate their procurement pipelines. Operators face headwinds from carbon-compliance costs under the K-ETS and EU ETS, exchange-rate volatility that affects imported components, and air-traffic infrastructure gaps outside the Seoul FIR. Even so, the South Korean aviation market remains attractive to OEMs, MRO firms, and technology vendors that can help carriers increase utilization, reduce emissions, and localize maintenance services.
Key Report Takeaways
- By aircraft type, commercial aviation led with 79.5% of South Korea aviation market share in 2024; military aviation is projected to grow at a 3.27% CAGR through 2030.
- By propulsion technology, turbofan engines commanded a 67.22% share of the South Korean aviation market size in 2024, while turboshaft engines were expected to register the fastest CAGR of 3.13% from 2024 to 2030.
- By end user, civil and commercial operators held 71.24% share of the South Korean aviation market size in 2024; government and defense agencies record the highest proja 71.24% share of the South Korean aviation market size in 2024; government and defense agencies are projected to record the highest CAGR at 3.36% through 2030.
South Korea Aviation Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Recovery in international passenger traffic | +0.8% | National hubs at Incheon and Gimpo | Medium term (2-4 years) |
| Fleet modernisation by Korean Air and low-cost carriers | +0.8% | Nationwide with spillover to MRO clusters | Long term (≥ 4 years) |
| Expansion of the indigenous fighter program | +0.6% | National with export reach to Southeast Asia and the Middle East | Long term (≥ 4 years) |
| Government incentives for sustainable and hydrogen-based aviation | +0.4% | National with APAC technology-transfer implications | Long term (≥ 4 years) |
| Growth of Incheon as an MRO and parts manufacturing hub | +0.5% | Incheon servicing Northeast Asia and trans-Pacific fleets | Medium term (2-4 years) |
| Roll-out of airport digitalisation technologies including A-CDM and biometrics | +0.6% | All national airports, Incheon leads | Short term (≤ 2 years) |
| Source: Mordor Intelligence | |||
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Recovery in International Passenger Traffic
International passenger flows have rebounded sharply, with domestic flight operations reaching 15,519 in December 2023, nearly matching the pre-pandemic intensity.[1]Invest Korea, “Domestic Flight Operations Reach Pre-COVID Levels,” investkorea.org Korean Air’s joint venture with Delta has restored US connectivity, launching the Salt Lake City service in June 2024 to deepen trans-Pacific linkages. Low-cost carriers T’way Air and Jeju Air expanded their domestic trunk routes and secured incremental international slots released during the merger review, thereby broadening leisure travel options. Slot scarcity at Incheon and Gimpo airports prompts operators to boost load factors, leading to the accelerated adoption of advanced air-traffic flow management solutions aligned with ICAO guidelines. These efficiency gains underpin a continued upliftment in the South Korean aviation market, without the need for immediate physical runway expansion.
Fleet Modernization by Korean Air and Low-Cost Carriers
Korean Air’s USD 50 billion order for 103 Boeing next-generation jets—20 777-9s, 25 787-10s, and 50 737-10s—will progressively replace older types through the late 2030s. Concentrating around five core aircraft families simplifies training, MRO, and parts stocking, yielding measurable cost and fuel-burn improvements. The carrier’s KRW 1.2 trillion (USD 844 million) aerospace center, located near Seoul, is set to open in 2030, unifying pilot, cabin crew, and maintenance training under one roof. Among LCCs, the integration of Jin Air with Air Busan and Air Seoul creates a 55-aircraft platform that can better leverage bulk engine maintenance contracts. These upgrade cycles catalyze aftermarket demand, bolstering domestic engine and component workshops and sustaining long-term value growth in the South Korean aviation market.
Expansion of the Indigenous Fighter Program
KAI’s KF-21 Boramae entered mass production in 2024 under a USD 1.41 billion deal for 120 fighters by 2032, positioning Korea among the few nations with advanced supersonic design capabilities. The FA-50 light attack jet has garnered Iraqi interest, and KAI is developing a single-seat variant to expand its export scope. Parallel rotorcraft programs such as the Surion transport helicopters and the LAH scout aim for more than 300 units by 2030. Korean Air supplements production with depot-level KC-330 tanker maintenance, translating commercial A330 know-how into military contracts. These achievements align with the Third Master Plan for Aerospace Industry Development, which aims to increase aerospace output to KRW 26.3 trillion (USD 0.018 trillion) by 2035 and triple sector employment.
Government Incentives for Sustainable and Hydrogen-Based Aviation
From 2027, airlines must blend 1% sustainable aviation fuel with conventional jet fuel under a national mandate supported by tax incentives and research and development (R&D) grants. The policy fits within the KRW 160 trillion Green New Deal, prioritizing hydrogen propulsion research led by the newly established Korea Aerospace Administration. The fourth K-ETS plan (2026-2035) scales paid carbon allocations, encouraging carriers to adopt more efficient equipment. Complementary programs such as the KRW 430 billion (USD 0.30 billion) K-UAM initiative fund AI-enabled traffic-management testbeds for electric vertical aircraft. Together, these actions foster technology leadership while mitigating airlines' escalating compliance costs.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Slot capacity constraints at major airports | -0.3% | Incheon and Gimpo | Short term (≤ 2 years) |
| Ageing air traffic control infrastructure | -0.2% | Secondary regional airports | Medium term (2-4 years) |
| Exchange rate volatility affecting imported aviation components | -0.2% | Nationwide manufacturing and MRO | Short term (≤ 2 years) |
| Rising carbon compliance costs under EU ETS and K-ETS | -0.2% | Operators on intercontinental and domestic networks | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
Slot Capacity Constraints at Major Airports
Incheon is already operating at 85% of its declared capacity,Korean and Gimpo at 95%, leaving limited room for schedule expansion and prompting carriers to prioritize wide-body up-gauging over additional frequencies. The Korean Air-Asiana combination concentrates demand, intensifying competition for peak slots despite remedies that released some pairs to T’way. The construction of a new runway at Gadeokdo Airport will unlock incremental capacity in southeast Korea post-2030. Still, near-term growth in the South Korea aviation market must rely on precision scheduling and collaborative decision-making systems to squeeze additional movements from existing infrastructure.
Rising Carbon-Compliance Costs under EU ETS and K-ETS
Aviation’s inclusion in the EU and Korean emissions trading systems levies carbon prices of USD 8–12 per ton on qualifying flights, adding to operating expenses for Korean carriers serving Europe while also covering increasing domestic traffic volumes.[2]Bank of Korea, “Export/Import Price Indexes,” bok.or.kr Airlines face administrative complexity in managing dual regulatory schemes, with fuel-efficient aircraft offering the primary hedge. Korean Air projects a 10% fuel-burn reduction once its Boeing 777-9 fleet is fully deployed, which will partially offset the compliance burden. Ramping up SAF usage provides an alternative pathway but requires scaling the supply chain and implementing cost-sharing mechanisms with the government and fuel suppliers.
Segment Analysis
By Aircraft Type: Commercial Aviation Drives Value While Defense Lifts Growth
Commercial aviation generated 79.5% of the South Korea aviation market size in 2024, cementing the segment’s dominance.[3]Yeoh Siew Hoon, “Korean Air and Asiana’s Merger,” Travel Weekly Asia, travelweekly-asia.com Widebody deployments, such as the 777-9 and 787-10, enhance nonstop reach to North America, while the 737-10 narrowbodies increase regional frequency. Long-haul traffic benefits from joint ventures with Delta and codeshares with emerging Southeast Asian partners.
Military aviation is scaling faster at a 3.27% CAGR to 2030 as KF-21 fighters, KC-330 tankers, and Surion helicopters roll off production lines. Export contracts diversify revenue and validate domestic research and development capabilities. Military procurement also supports local parts suppliers, deepening industrial linkages and enhancing the overall South Korean aviation market.
Note: Segment shares of all individual segments available upon report purchase
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By Propulsion Technology: Turbofan Dominance with Turboshaft Momentum
Turbofan platforms underpinned 67.22% of 2024 revenue, reflecting their centrality in commercial widebody, single-aisle jets, and modern fighters such as the KF-21. Next-generation engines promise double-digit efficiency gains, cutting fuel costs and carbon exposure. Korean Air’s long-term services agreement with GE Aerospace ensures cost-predictable aftermarket coverage.
Turboshaft engines are projected to post the highest 3.13% CAGR, buoyed by the procurement of Surion and LAH helicopters, as well as the procurement and forthcoming UAM craft powered by hybrid or electric rotor systems. MRO providers are adapting test-cell capabilities to support this growing fleet, broadening the South Korean aviation market’s propulsion mix.
By End User: Civil Operators Hold Scale but Defense Budgets Grow Fastest
Civil and commercial operators accounted for 71.24% of South Korea's aviation market share in 2024 through Korean Air, Asiana, Jeju Air, and freight carriers. Consolidation secures economies of scale and network depth, which are vital for competing against Chinese and Japanese mega-airlines.
Government and defense agencies expand at a 3.36% CAGR as Seoul intensifies indigenous equipment procurement and multiplies export-credit lines to stimulate overseas sales. KC-330 tanker MRO and KF-21 production reinforce the segment’s contribution, ensuring a diversified demand base and stabilizing the South Korean aviation market through cyclical passenger swings.
Note: Segment shares of all individual segments available upon report purchase
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Geography Analysis
Incheon International Airport dominates national throughput, processing over 50% of all passengers in 2024. The airport’s fourth-phase expansion will extend capacity to 106 million passengers by 2028, establishing headroom for additional intercontinental routes. Gimpo complements Incheon on domestic and high-frequency Japan services, achieving 95% slot utilization, which necessitates the digitalization of ground handling to maximize turns.
Regional airports, such as Jeju, Daegu, and Gimhae in Busan, provide secondary point-to-point services and relief capacity during peak travel seasons. Gadeokdo’s new airport, funded at KRW 689 billion (approximately USD 0.48 billion), will provide the southeast with a long-runway alternative capable of handling wide-body aircraft post-2030.
Military airfields, clustered across the peninsula for strategic dispersion, host KF-21 and Surion operations and connect to Korean Air’s Busan Tech Center for depot-level work. A unified Seoul FIR simplifies air-traffic coordination, while bilateral accords with Japan and China aim to smooth cross-border flows for overflight lanes
Competitive Landscape
The South Korean aviation market exhibits a moderate consolidated structure dominated by global aerospace conglomerates, with the top five companies controlling a significant portion of the market share. Korean Air’s acquisition of Asiana creates a fleet of more than 250 aircraft and confers network density across the trans-Pacific, European, and fast-growing Southeast Asian corridors.[4]Choi Mun-hee, “Hanjin Group Strategy,” Business Korea, businesskorea.co.kr Korean Air’s December 2024 purchase of Asiana Airlines vaulted the flag-carrier to the world’s 10th-largest airline by fleet size. It gave it roughly 60% of South Korea’s domestic seat capacity. However, antitrust conditions that forced it to cede specific routes to T’way Airlines and divest portions of its cargo operation have moderated the immediate competitive impact.
Vertical integration features prominently in the group’s strategy. The airline has broadened its scope from passenger and cargo services to defense-grade maintenance, repair, and overhaul (MRO) work, winning long-term contracts to service KC-330 aerial refueling aircraft while simultaneously committing USD 50 billion to acquire 103 next-generation Boeing jets for commercial use.
In defense, KAI leverages KF-21 and FA-50 exports to expand its international customer base, while Hanwha Aerospace supplies avionics and propulsion subsystems. US partnerships on sustainment frameworks broaden addressable MRO volume for Korean contractors.
South Korea Aviation Industry Leaders
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Korea Aerospace Industries, Ltd.
-
The Boeing Company
-
Airbus SE
-
Lockheed Martin Corporation
-
Dassault Aviation
- *Disclaimer: Major Players sorted in no particular order
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Recent Industry Developments
- October 2025: L3Harris Technologies, Inc., secured a USD 2.6 billion contract from South Korea to modify four Bombardier Global 6500 business jets with IAI EL/W-2085 AESA radar systems for the Republic of Korea Air Force by 2032. Korean Air will procure these aircraft, and L3Harris Technologies, Inc. will modify two units while the remaining undergo modifications in South Korea.
- June 2025: Bell Textron Inc., a subsidiary of Textron Inc., delivered 40 Bell 505 helicopters to the Republic of Korea Army (ROKA) and the Republic of Korea Navy (ROKN)
- December 2023: Korea Aerospace Industries Ltd. (KAI) secured a KRW 1,405.3 billion (USD 1.09 billion) contract with the Defense Acquisition Program Administration for the second batch of the Army's Light Armed Helicopter (LAH).
South Korea Aviation Market Report Scope
Commercial Aviation, General Aviation, Military Aviation are covered as segments by Aircraft Type.
By Aircraft Type
| Commercial Aviation | Passenger Aircraft | Narrowbody Aircraft |
| Widebody Aircraft | ||
| Freighter | ||
| General Aviation | Business Jets | Large Jet |
| Mid-Size Jet | ||
| Light Jet | ||
| Helicopters | ||
| Others | ||
| Military Aviation | Fixed-Wing Aircraft | Multi-Role Aircraft |
| Training Aircraft | ||
| Transport Aircraft | ||
| Others | ||
| Rotorcraft | Multi-Mission Helicopter | |
| Transport Helicopter | ||
| Training | ||
By Propulsion Technology
| Turboprop |
| Turbofan |
| Piston Engine |
| Turboshaft |
| Others |
By End User
| Business and General Aviation Operators |
| Business and General Aviation Operators |
| Business and General Aviation Operators |
| By Aircraft Type | Commercial Aviation | Passenger Aircraft | Narrowbody Aircraft |
| Widebody Aircraft | |||
| Freighter | |||
| General Aviation | Business Jets | Large Jet | |
| Mid-Size Jet | |||
| Light Jet | |||
| Helicopters | |||
| Others | |||
| Military Aviation | Fixed-Wing Aircraft | Multi-Role Aircraft | |
| Training Aircraft | |||
| Transport Aircraft | |||
| Others | |||
| Rotorcraft | Multi-Mission Helicopter | ||
| Transport Helicopter | |||
| Training | |||
| By Propulsion Technology | Turboprop | ||
| Turbofan | |||
| Piston Engine | |||
| Turboshaft | |||
| Others | |||
| By End User | Business and General Aviation Operators | ||
| Business and General Aviation Operators | |||
| Business and General Aviation Operators | |||
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Market Definition
- Aircraft Type - All the aircraft related to commercial, military and general aviation have been included in this study
- Sub-Aircraft Type - Fixed-Wing passenger aircraft, freighter aircraft, business jets, piston fixed-wing aircraft, military fixed-wing aircraft, and rotorcraft are included under this study.
- Body Type - Body type includes all types of aircraft segmented based on application/size/capacity/role.
| Keyword | Definition |
|---|---|
| IATA | IATA stands for the International Air Transport Association, a trade organization composed of airlines around the world that has an influence over the commercial aspects of flight. |
| ICAO | ICAO stands for International Civil Aviation Organization, a specialized agency of the United Nations that supports aviation and navigation around the globe. |
| Air Operator Certificate (AOC) | A certificate granted by a National Aviation Authority permitting the conduct of commercial flying activities. |
| Certificate Of Airworthiness (CoA) | A Certificate Of Airworthiness (CoA) is issued for an aircraft by the civil aviation authority in the state in which the aircraft is registered. |
| Gross Domestic Product (GDP) | Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period by countries. |
| RPK (Revenue Passenger Kilometres) | The RPK of an airline is the sum of the products obtained by multiplying the number of revenue passengers carried on each flight stage by the stage distance - it is the total number of kilometers traveled by all revenue passengers. |
| Load Factor | The load factor is a metric used in the airline industry that measures the percentage of available seating capacity that has been filled with passengers. |
| Original Equipment Manufacturer (OEM) | An original equipment manufacturer (OEM) traditionally is defined as a company whose goods are used as components in the products of another company, which then sells the finished item to users. |
| International Transportation Safety Association (ITSA) | International Transportation Safety Association (ITSA) is an international network of heads of independent safety investigation authorities (SIA). |
| Available Seats Kilometre (ASK) | This metric is calculated by multiplying Available Seats (AS) in one flight, defined above, multiplied by the distance flown. |
| Gross Weight | The fully-loaded weight of an aircraft, also known as “takeoff weight,” which includes the combined weight of passengers, cargo, and fuel. |
| Airworthiness | The ability of an aircraft, or other airborne equipment or system, to operate in flight and on the ground without significant hazard to aircrew, ground crew, passengers or to other third parties. |
| Airworthiness Standards | Detailed and comprehensive design and safety criteria applicable to the category of aeronautical product (aircraft, engine or propeller). |
| Fixed Base Operator (FBO) | A business or organization that operates at an airport. An FBO provides aircraft operating services like maintenance, fueling, flight training, charter services, hangaring, and parking. |
| High Net worth Individuals (HNWIs) | High Net worth Individuals (HNWIs) are individuals with over USD 1 million in liquid financial assets. |
| Ultra High Net worth Individuals (UHNWIs) | Ultra High Net worth Individuals (UHNWIs) are individuals with over USD 30 million in liquid financial assets. |
| Federal Aviation Administration (FAA) | The division of the Department of Transportation is concerned with aviation. It operates Air Traffic Control and regulates everything from aircraft manufacturing to pilot training to airport operations in the United States. |
| EASA (European Aviation Safety Agency) | The European Aviation Safety Agency is a European Union agency established in 2002 with the task of overseeing civil aviation safety and regulation. |
| Airborne Warning and Control System (AW&C) aircraft | Airborne Warning and Control System (AEW&C) aircraft is equipped with a powerful radar and on-board command and control center to direct the armed forces. |
| The North Atlantic Treaty Organization (NATO) | The North Atlantic Treaty Organization (NATO), also called the North Atlantic Alliance, is an intergovernmental military alliance between 30 member states – 28 European and two North American. |
| Joint Strike Fighter (JSF) | Joint Strike Fighter (JSF) is a development and acquisition program intended to replace a wide range of existing fighter, strike, and ground attack aircraft for the United States, the United Kingdom, Italy, Canada, Australia, the Netherlands, Denmark, Norway, and formerly Turkey. |
| Light Combat Aircraft (LCA) | A light combat aircraft (LCA) is a light, multirole jet/turboprop military aircraft, commonly derived from advanced trainer designs, designed for engaging in light combat. |
| Stockholm International Peace Research Institute (SIPRI) | Stockholm International Peace Research Institute (SIPRI) is an international institute that provides data, analysis, and recommendations for armed conflict, military expenditure, and arms trade as well as disarmament and arms control. |
| Maritime Patrol Aircraft (MPA) | A maritime patrol aircraft (MPA), also known as maritime reconnaissance aircraft is a fixed-wing aircraft designed to operate for long durations over water in maritime patrol roles, in particular, anti-submarine warfare (ASW), anti-ship warfare (AShW), and search and rescue (SAR). |
| Mach Number | The Mach number is defined as the ratio of true airspeed to the speed of sound at the altitude of a given aircraft. |
| Stealth Aircraft | Stealth is a Common term applied to low observable (LO) technology and doctrine, that makes an aircraft near invisible to radar, infrared or visual detection. |
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Research Methodology
Mordor Intelligence follows a four-step methodology in all our reports.
- Step-1: Identify Key Variables: In order to build a robust forecasting methodology, the variables and factors identified in Step-1 are tested against available historical market numbers. Through an iterative process, the variables required for market forecast are set and the model is built on the basis of these variables.
- Step-2: Build a Market Model: Market-size estimations for the historical and forecast years have been provided in revenue and volume terms. For sales conversion to volume, the average selling price (ASP) is kept constant throughout the forecast period for each country, and inflation is not a part of the pricing.
- Step-3: Validate and Finalize: In this important step, all market numbers, variables and analyst calls are validated through an extensive network of primary research experts from the market studied. The respondents are selected across levels and functions to generate a holistic picture of the market studied.
- Step-4: Research Outputs: Syndicated Reports, Custom Consulting Assignments, Databases & Subscription Platforms
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