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A view of Korea Aerospace Industries (KAI) headquarters in Sacheon, South Gyeongsang Province, South Korea. (Photo = KAI) |
[Alpha Biz= Paul Lee] SEOUL, South Korea – October 21, 2025 – Korea Aerospace Industries (KAI), South Korea’s sole aircraft manufacturer, is facing renewed calls for privatization amid a prolonged management vacuum, repeated contract losses, and rising frustration from overseas clients.
During a parliamentary audit earlier this month, Defense Minister Ahn Kyu-baek described KAI as being in a “critical situation,” reigniting debate over whether the government-backed firm should be sold to the private sector. Despite being nominally private, KAI’s largest shareholder is the state-run Export-Import Bank of Korea (26.4%), giving it the character of a quasi–public enterprise.
Since the resignation of CEO Kang Goo-young, the company has suffered setbacks, losing helicopter and electronic warfare aircraft bids to Korean Air, and facing delivery concerns over its FA-50 fighter jet deal with Poland. Industry sources say political interference and unstable leadership have damaged KAI’s competitiveness and reputation.
Potential buyers such as Hanwha Aerospace, LIG Nex1, and Hyundai Rotem have been floated as possible candidates if privatization proceeds.
“Without depoliticizing management, KAI risks falling further behind in the global defense market,” one industry official said.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
