Incheon International Airport Corporation on Tuesday signed a memorandum of agreement with Israel’s state-owned aerospace and aviation manufacturer, Israel Aerospace Industries, to build an aircraft conversion center at Incheon Airport.

The deal will see IIAC begin work on building infrastructure, with production of the first batch of passenger-to-freighter converted aircraft set to begin in 2024 in collaboration with South Korean aviation service company Sharp Technics K.

After fending off competition from China and India, Incheon Airport will become the first overseas production base where IAI’s B777-300ER aircraft will be converted, the corporation said.

Aircraft conversion is intended to extend the economic life of a passenger aircraft after it is 15 to 20 years old. Conversion is preferred by cargo airlines, given the lower production costs.

According to IIAC’s projection, aircraft conversion and large cargo plane maintenance at the conversion center will generate some 1 trillion won ($891.89 million) in exports by 2040 and will contribute to the local aviation maintenance, repair and overhaul industry.

Airlines are pivoting to the air cargo business amid the pandemic. Korean Air posted 4.2 trillion won in cargo sales in 2020, up 66 percent from the previous year following an increase in demand for COVID-19 diagnostic kits and auto parts, according to the airline.

By Yim Hyun-su (hyunsu@heraldcorp.com)