MRO & Manufacturing
Korean Air and Busan Invest 200 Billion Won in Aerospace Facility
Korean Air and Busan commit 200 billion won to build a new aerospace plant for UAVs, aircraft parts, and military upgrades in Busan.

This article summarizes reporting by ChosunBiz. The original report may be subject to premium access; this article summarizes publicly available elements and public remarks.
Korean Air Lines and the City of Busan have officially signed a Memorandum of Understanding (MOU) for a 200 billion won (approximately $150 million USD) investment to construct a new drone and aerospace manufacturing facility. According to reporting by ChosunBiz on March 30, 2026, this agreement marks the largest aerospace investment the city has ever attracted.
The new plant will be situated within Korean Air’s existing Busan Tech Center in the Gangseo District. It is designed to serve as a multipurpose hub, focusing on next-generation commercial aircraft components, military aircraft upgrades, and advanced unmanned aerial vehicles (UAVs).
This development aligns with Busan’s strategic vision to establish a “Future Aviation Cluster” connected to the upcoming Gadeokdo New Airport, positioning the region as a central player in the global aerospace supply chain.
Facility Specifications and Strategic Objectives
Expanding the Busan Tech Center
The planned facility will significantly expand Korean Air’s manufacturing footprint. Based on industry research data, the new plant will feature a total floor area of 52,892 square meters and will be constructed on a 36,363-square-meter idle site within the current Tech Center grounds. The existing Busan Tech Center, established in 1976, already covers an expansive 717,359 square meters and is recognized as Asia’s largest military aircraft maintenance facility.
The multipurpose plant will focus on three primary operational pillars: manufacturing AI-powered UAVs, producing structural components for next-generation civil aircraft, and conducting maintenance, repair, overhaul, and upgrade (MROU) services for military aircraft.
Leadership Perspectives
The signing ceremony was attended by key regional and corporate leaders, including Busan Mayor Park Heong-joon and Korean Air Lines Vice Chairman and CEO Woo Kee-Hong. During the event, corporate leadership emphasized the forward-looking nature of the project.
“This investment is a strategic decision to lead the global unmanned aircraft market and secure capabilities for next-generation aircraft manufacturing,” stated Woo Kee-Hong, Vice Chairman and CEO of Korean Air Lines.
Mayor Park emphasized the city’s commitment to the project, noting in public remarks that Busan will provide administrative and financial backing to ensure Korean Air serves as the anchor for the region’s future aviation cluster.
Korean Air’s Broader Aerospace Ambitions
Beyond Passenger Aviation
While globally recognized as a commercial passenger airline, Korean Air operates as South Korea’s only fully integrated aerospace company. According to industry background data, the company has been manufacturing aircraft parts since 1977, supplying major aerospace firms like Boeing and Airbus with components such as 787 Dreamliner parts and A350 cargo doors.
The Aerospace Business Division has recently proven to be a highly profitable segment for the airline. This success is partly driven by substantial defense contracts, including a reported 1 trillion won project to upgrade UH-60 Black Hawk helicopters for the South Korean military.
The Push into AI and Advanced Air Mobility
Korean Air is aggressively expanding its footprint in the drone and artificial intelligence sectors. At the “Drone Show Korea 2026” held in Busan in late February, the company unveiled South Korea’s first physical AI-powered subsonic UAV, developed alongside U.S. defense technology firm Anduril Industries. Furthermore, the airline has made strategic investments in Pablo Air, a domestic startup specializing in swarm AI drone technology.
In the realm of Advanced Air Mobility (AAM), Korean Air is laying the groundwork for commercial air taxis. The company has partnered with Skyports for vertiport development and holds an exclusive arrangement to operate up to 100 “Midnight” eVTOL aircraft from Archer Aviation.
Market Context and Outlook
AirPro News analysis
We view this 200 billion won investment as a critical physical manifestation of Korean Air’s strategy to diversify its revenue streams. By building a robust defense and technology portfolio, the airline is actively insulating itself from the traditional volatilities of the passenger travel market, such as fluctuating oil prices and exchange rates.
Furthermore, the timing of this MOU coincides with strong governmental backing for the sector. In March 2026, the Korea Aerospace Administration (KAA) announced a 200 billion won “New Space Fund” to support domestic aerospace companies. Korean Air’s expansion in Busan perfectly positions the company to capitalize on both regional infrastructure developments, like the Gadeokdo New Airport, and national strategic funding initiatives.
Frequently Asked Questions
How much is Korean Air investing in the new Busan plant?
Korean Air is investing 200 billion won (approximately $150 million USD) in the new facility, marking the largest aerospace investment in Busan’s history.
Where will the new aerospace plant be located?
The plant will be built on an idle 36,363-square-meter site within Korean Air’s existing Busan Tech Center in the Gangseo District.
What will the new facility produce?
The plant will serve as a multipurpose hub to manufacture next-generation commercial aircraft parts, upgrade military aircraft, and produce future AI-powered unmanned aerial vehicles (UAVs).
Sources
Photo Credit: News1
MRO & Manufacturing
Embraer Renews Component Support Deal With Alliance Airlines
Embraer and Alliance Airlines extend a Component Support Agreement for 40 E190s, contributing to a record US$5.6B services backlog.

Embraer S.A. and Alliance Airlines have renewed a long-term Component Support Agreement to provide ongoing maintenance and repair solutions for 40 Embraer E190 aircraft operating in Australia.
Announced on October 21, 2026, the contract extension secures supply chain stability for Australia’s largest E-Jet operator. The agreement ensures component availability for a fleet heavily utilized in regional connectivity and specialized charter operations. According to Embraer, the deal directly contributed to the manufacturer’s record third-quarter services backlog.
Securing operational reliability for FIFO networks
Alliance Airlines operates a highly specialized network as Australasia’s leading provider of Aircraft, Crew, Maintenance, and Insurance (ACMI) services, alongside contract and charter flights. A significant portion of the carrier’s operations supports the Australian mining, energy, and government sectors through Fly-in Fly-out (FIFO) services. These operations require high dispatch reliability in remote and demanding environments, where schedule disruptions can severely impact resource extraction and industrial projects.
To maintain operational standards, Alliance Airlines holds the International Air Transport Association (IATA) Operational Safety Audit (IOSA) certification and maintains Flight Safety Foundation “BARS Gold” status. The renewed Component Support Agreement guarantees the airline access to Embraer’s global inventory of spare parts and repair capabilities. By pooling component resources, the airline can minimize aircraft downtime, streamline its supply chain, and manage maintenance costs predictably across its expansive network.
Carlos Naufel, President and CEO of Embraer Services & Support, highlighted the operational impact of the fleet in a press release issued on October 21, 2026.
Alliance Airlines’ E-Jets have been instrumental in enhancing Australia’s regional connectivity. As the airline grows, we remain committed to providing the maintenance solutions, expertise and support needed to keep the E190s performing at the highest levels every day.
Embraer’s growing aftermarket backlog
The Alliance Airlines renewal aligns with a broader expansion of Embraer’s aftermarket business. On October 23, 2026, the Brazilian manufacturer reported a record company-wide order backlog of US$35.7 billion for the third quarter of 2026.
Within that total, the Services & Support division reached its own all-time high backlog of US$5.6 billion, representing a 14 percent year-over-year increase. Embraer explicitly cited the Alliance Airlines contract as a key contributor to this financial milestone.
The manufacturer has actively pursued similar maintenance contracts globally to secure long-term revenue streams from its mature aircraft programs. In a comparable recent transaction highlighted in the third-quarter financial results, Embraer signed a Component Pool Program Agreement with Portugália Airlines to support its fleet of 19 Embraer E190 aircraft. These agreements demonstrate a concerted effort by Embraer to retain aftermarket market share as its first-generation E-Jet aircraft transition to secondary operators.
Alliance Airlines and the Australian E-Jet market
Asia-Pacific represents a foundational market for Embraer in the Australia region. The manufacturer delivered its first aircraft to an Australian customer in 1978. Today, approximately 70 E-Jets are in service across six different Australian operators, heavily supporting the country’s critical FIFO operations and regional airline networks.
Alliance Airlines introduced the Embraer E190 to its fleet in 2021. The carrier rapidly expanded its reliance on the type to support both its independent charter operations and wet lease agreements with major domestic carriers, including Qantas and Virgin Australia.
To fuel this expansion, Alliance Airlines has aggressively acquired secondary market airframes. On February 27, 2023, the airline announced an agreement to purchase 30 additional Embraer E190 aircraft from aviation lessor AerCap. These aircraft, previously operated by a North America-based airline, were scheduled for delivery through January 2026.
While Alliance Airlines owns more than 60 Embraer E190s in total, the newly renewed Component Support Agreement specifically covers an active fleet of 40 operational aircraft. The remaining airframes in the carrier’s inventory are utilized for spare parts, undergo heavy maintenance, or await certification for service entry in Australia.
AirPro News analysis
The renewal of this Component Support Agreement underscores a strategic shift in how regional aircraft manufacturers manage the lifecycle of their products. As the Embraer E190 transitions deeper into the secondary market, Embraer is successfully capturing aftermarket revenue by offering original equipment manufacturer (OEM) backed support to operators acquiring used airframes. For Alliance Airlines, the Embraer E190 has proven to be an ideal platform for the Australian mining sector. The aircraft offers the payload and range required for remote Fly-in Fly-out operations while maintaining economics that support Aircraft, Crew, Maintenance, and Insurance (ACMI) and charter business models. By locking in component support directly with the manufacturer, Alliance Airlines mitigates the supply chain risks associated with operating a mature aircraft variant in a high-utilization environment. We view this agreement as a mutually beneficial model that secures Embraer’s services backlog while stabilizing operational costs for Australia’s largest E-Jet operator.
Photo Credit: Embraer
MRO & Manufacturing
Baxter Aerospace Invests $19.55M in Utah Manufacturing Facility
Baxter Aerospace expands into Washington County, Utah with a $19.55M facility to scale UAS and satellite comms production.

Baxter Aerospace will invest $19.55 million to lease and equip a new manufacturing facility in Washington County, Utah, transitioning its unmanned aircraft and communications systems from prototype development into full-scale production.
The expansion, announced in an October 8, 2026, press release by the Utah Governor’s Office of Economic Development (GOED), is projected to create 90 high-paying jobs over the next five years while strengthening the state’s aerospace and defense industrial base.
Transitioning to full-scale production
The new facility in Washington City will feature high-capacity infrastructure, specialized testing spaces, and security systems. This site is designed to support mission-critical work across aerospace, defense, satellite communications, autonomous aircraft, and public safety.
Baxter Aerospace CEO Jeff Baxter stated that expanding in southern Utah allows the company to increase manufacturing capacity and support growing customer needs. He noted the company is prepared to help shape the region’s aerospace future.
The project is backed by a Rural Economic Development Tax Increment Financing (REDTIF) post-performance tax credit approved by the GOED. Under the agreement, Baxter Aerospace can earn a rebate of up to 30% on new state revenues generated over the five-year term, capped at $456,939.
State officials project the expansion will generate $20,758,160 in new state wages and $1,523,131 in new state tax revenue during that period. GOED Commissioner Jefferson Moss noted that the investment signals Utah’s economic future is fueled by frontier innovation. Washington County Commissioner Adam Snow added that the expansion connects local talent with emerging aerospace opportunities.
Scaling the BA-1 Dragonfly and defense portfolio
The manufacturing expansion follows a period of steady growth for the St. George-based defense and aerospace innovator. Brothers Jeff and Michael Baxter founded the company in 2015 following a severe Oregon wildfire, focusing their initial efforts on real-time sensing, resilient communications, and autonomous systems for emergency response and defense applications.
The company’s flagship aerospace product is the BA-1 Dragonfly. The Dragonfly is a Group 3 vertical takeoff and landing (eVTOL) unmanned aircraft system designed for intelligence, surveillance, and reconnaissance (ISR) missions, featuring over 12 hours of endurance.
Alongside the BA-1 Dragonfly, Baxter Aerospace produces deployable broadband satellite communications kits that utilize low Earth orbit (LEO) networks. The company also manufactures precision components for the fusion and nuclear energy sectors.
To support the scaling of these product lines, Baxter Aerospace secured a $6 million Series A funding round in July 2025. The capital was raised from the Department of Defense (DoD) Accelerator fund, managed by Accuidity Capital Management, specifically to accelerate production of the Dragonfly system and the deployable communications kits. The new Washington County facility represents the physical infrastructure required to execute that production scale-up between late 2026 and 2031.
Photo Credit: Utah Governor’s Office of Economic Development
MRO & Manufacturing
IAI 777-300ERSF P2F Conversions Launch in North America
The first Boeing 777-300ER for P2F conversion in North America arrives at Ascent Aviation Services in Marana, Arizona.

The first Boeing 777-300ER slated for passenger-to-freighter (P2F) conversion in North America arrived at Ascent Aviation Services in Marana, Arizona, on October 22, 2026. The induction marks the regional launch of the Israel Aerospace Industries (IAI) modification program for the widebody twinjet.
The arrival of the World Star Aviation aircraft initiates operations at a newly expanded site designed to increase global capacity for the Boeing 777-300ERSF program, according to a joint press release issued by the companies.
Expanding global conversion capacity
Ascent Aviation Services, an independent aircraft aftermarket service provider and Federal Aviation Administration (FAA) Class IV Part 145 certified repair station, will operate two parallel conversion lines at its Pinal Air Park campus. To accommodate the Boeing 777-300ERSF program, the company invested $70 million to construct two 90,000-square-foot widebody hangars. Ascent broke ground on the facilities on March 29, 2024, effectively tripling the site’s hangar capacity.
“The launch of Boeing 777-300ERSF conversions in North America marks an important milestone for IAI’s global conversion program,” Yaacov Berkovitz, executive vice president and general manager of IAI Aviation Group, stated in the release. “Together with Ascent Aviation Services, we are expanding production capacity and bringing our conversion capabilities closer to customers in the region.”
Ascent Aviation Services chief executive officer David Querio noted that the induction represents the beginning of a long-term partnership with IAI, with multiple Boeing 777-300ERSF conversions planned for the Marana site.
“Our vision is to shape the future of aviation by turning engineering innovation into lasting value for our customers,” IAI president and chief executive officer Guy Bar Lev added. “Passenger-to-freighter conversions are a key part of that vision, extending the productive life of aircraft and helping airlines adapt to changing market needs.”
World Star Aviation’s fleet strategy
The inaugural aircraft belongs to World Star Aviation, a full-service aircraft and engine lessor headquartered in London. The company specializes in mid-to-late life assets and manages a portfolio of approximately 150 aircraft and engines. This includes 60 narrowbody and widebody freighters currently on lease to cargo operators globally.
World Star Aviation partner Yoyo Allalouf cited the strength of the IAI program during a critical period for widebody passenger-to-freighter production as the primary driver for their selection.
“IAI’s dominance in the widebody P2F space, demonstrated by its Boeing 747 and 767 programs, together with our long-standing relationship, underpinned our decision to choose IAI for the 777-300ERSF,” added Garreth Slevin, partner at World Star Aviation.
The rise of the “Big Twin” freighter
The Boeing 777-300ERSF program, marketed as “The Big Twin,” launched on October 22, 2019, as a joint venture between IAI and GECAS, which was subsequently acquired by AerCap. It remains the only certified P2F conversion program for the Boeing 777-300ER.
The converted freighter offers 25 percent more cargo volume than a production Boeing 777-200LRF and 15 percent more volume than a Boeing 747-400BCF. This capacity positions the aircraft as a direct replacement for aging Boeing 747-400 and McDonnell Douglas MD-11 freighter fleets.
IAI brings over 50 years of experience to the program, having delivered more than 350 converted cargo aircraft across Boeing 747, 767, 737, and Airbus A330 platforms. The company currently holds a dominant market share in medium-size freighter conversions, particularly with the Boeing 767.
The 777-300ERSF recently transitioned from certification into commercial service. In August 2026, Challenge Group took delivery of its second 777-300ERSF, which marked the fifth redelivery of the type across the industry for the year.
AirPro News analysis
We view the activation of the Marana conversion lines as a critical step in maturing the Boeing 777-300ERSF program. By establishing a North American footprint, IAI mitigates geographic bottlenecks and provides operators with a domestic option for heavy modifications. The $70 million infrastructure investment by Ascent Aviation Services indicates strong long-term confidence in the widebody conversion market, even as the air cargo sector normalizes following pandemic-era peaks. As legacy quad-engine and tri-engine freighters approach mandatory retirement or become economically unviable, the availability of parallel conversion lines in the United States ensures IAI can capture a significant share of the impending widebody replacement cycle.
Photo Credit: IAI
-
Business Aviation3 days agoDTA Aircraft JP1 eVTOL Targets April 2027 US Flight Testing
-
Regulations & Safety2 days agoFAA Launches MedGuide Medication Database for Aviators
-
Business Aviation4 days agoCivil Air Patrol Orders 21 Cessna Aircraft From Textron Aviation
-
Space & Satellites3 days agoBAE Systems Acquires Colorado Facility for Space Hardware
-
Business Aviation3 days agoUniversal Aviation Rebrands as Affinity Aviation at NBAA 2026


