![Korean Air displayed its in-development AI small multipurpose unmanned aircraft, a physical AI subsonic unmanned vehicle, and a small strike drone at Drone Show Korea. [Photo = Korean Air]](https://contents-cdn.viewus.co.kr/image/2026/03/CP-2023-0070/image-befab270-294c-47bb-88d1-8ac69d79fdc7.jpeg)
On the 11th, industry sources said Korean Air’s Aerospace Business Division is pursuing an expansion of its unmanned systems business with U.S. defense firm Anduril. At last month’s Drone Show Korea (DSK) in Busan, the company showcased AI-enabled small UAVs and swarm-capable drones. The small systems on display drew interest from U.S. forces in Korea and from officials representing Southeast Asian and Middle Eastern nations. Korean Air has been developing small battlefield-capable UAVs with the Agency for Defense Development and is preparing for commercialization.
Small UAVs have altered the calculus in recent conflicts in the Middle East and Europe, performing reconnaissance, precision strikes and air-defense suppression. Bloomberg has reported Iran’s primary loitering munition, the Shahed-136, costs roughly 30 million KRW (about $22,500) apiece. By contrast, the air-defense missiles used to shoot them down can run into the tens of millions of dollars. That cost asymmetry helps explain the global rush to acquire drone capabilities.
The U.S. Department of Defense has launched a “Drone Dominance Program” to mass-field high-performance, low-cost systems. The Pentagon plans to invest about $1.1 billion through next year to field more than 350,000 expendable low-cost loitering munitions.
Korean Air, meanwhile, is broadening its footprint in the domestic defense sector. It is simultaneously developing a medium-altitude unmanned aerial vehicle (MUAV) roughly the size of a conventional fighter and a low-observable unmanned wingman aircraft while pursuing orders. The company rolled out its first prototype last year.
The company has also secured concrete military aviation contracts. In August last year, the Defense Acquisition Program Administration selected Korean Air as the preferred bidder for a KRW 961.3 billion (about $721 million) program to upgrade the performance of 36 UH-60 Black Hawk helicopters. In December, Korean Air, in consortium with LIG Nex1, won a KRW 1.8 trillion (about $1.35 billion) Block-I electronic warfare system development contract. It has also been awarded the airborne command-and-control aircraft program, valued at KRW 3.9 trillion (about $2.93 billion), reinforcing its defense aviation base.
A Korean Air official said the company is leveraging its accumulated technology and experience to pursue diverse business opportunities aimed at strengthening the domestic aerospace industry’s capabilities and building a sustainable growth foundation.
