South Korean full-service and budget carriers including Korean Air Lines Co., Asiana Airlines Inc. and Jeju Air Co. will jointly campaign for an extension in the sunset customs break on imports of aircraft parts and eventual lifting in the tariffs.
The carriers will submit joint request, asking the government to extend the sunset tariff exemptions for aircraft parts replacements that would be phased out from 2019 and completely restored in 2023 as to keep price competitiveness against other national airliners that purchase repair parts tariff-free.
Commercial airliners of 32 countries, including the United States, Japan, and European Union purchase spare supplies without any duties. Seoul also must seek full liberalization in parts trade to ensure fair playing field for Korean carriers, the industry said.
In a hearing on the issue on Wednesday sponsored by the National Assembly, the Korea Civil Aviation Association said carriers of governments that signed into the World Trade Organization (WTO)’s agreement on Trade Civil Aircraft (TCA) enjoy tariff-free trade in civil airline instruments and spare parts.
Seoul also must hasten to join the TCA group and meanwhile extend the duty break for airliners.
The association estimated that the lifting of the sunset duty exemption on jet parts would cost the local airlines about 227.6 billion won ($208.5 million) from 2019 to 2022 - 191.6 billion won in duties and 36 billion won in surtax for rural development.
By Moon Ji-woong and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]