A new air-cooled waste heat removal system with a direct contact heat exchanger was designed for SMRs requiring 200 MW of waste heat removal. Conventional air-cooled systems use fin structure causing high thermal resistance; therefore, a large cooling tower is required. The new design replaces the fin structure with a vertical string type direct contact heat exchanger which has the most effective performance among tested heat exchangers in a previous study. The design results showed that the new system requires a cooling tower 50% smaller than that of the conventional system. However, droplet formation on a falling film along a string caused by Rayleigh-Plateau instability decreases heat removal performance of the new system. Analysis of Rayleigh-Plateau instability considering drag force on the falling film surface was developed. The analysis results showed that the instability can be prevented by providing thick string. The instability is prevented when the string radius exceeds the capillary length of liquid by a factor of 0.257 under stagnant air and 0.260 under 5 m/s air velocity.