The bidding for Korea’s 8.5 trillion won ($8.3 billion) homegrown fighter jet development program fell through after Korean Air failed to submit its proposal on Monday, leaving state-run Korea Aerospace Industries as the sole bidder for the so-called KF-X project.
But analysts said Korean Air apparently aimed to earn time to participate in the final competition with KAI.
The Defense Acquisition Program Administration, the state-run arms procurement agency, said according to the government’s procurement rules, it will reopen the bid due to lack of competition.
Employees work on the production line of the Korea Aerospace Industries’ plant in Sacheon, South Gyeongsang Province. (Bloomberg)
If there is no competition again in the second bid, which will close in two weeks around Feb. 24, the DAPA is supposed to sign a sole-sourcing contract with KAI.
Industry watchers, however, said it is too early to assess that KAI has the upper hand as they believe its sole competitor Korean Air delayed the bid to earn more time to prepare.
“Korean Air recently reached a verbal agreement with Airbus Defence and Space for partnership, but it failed to sign a contact with the European partner last week,’’ a source close to the project said.
Airbus Defense and Space, the defense and aerospace arm of Airbus Group, is the manufacturer of the multirole fighter Eurofighter.
“The air carrier will soon sign a partnership agreement with its European technical partner and jointly prepare for the reopened bid,’’ the source said.
KAI has also teamed up with U.S.-based Lockheed Martin.
It holds a competitive edge over the air carrier in manufacturing aircrafts, based upon its experience developing the T-50 Golden Eagle supersonic trainer and the utility helicopter Surion.
On the other hand, industry watchers have said Korean Air is able to compete with KAI through better investment capacity.
“Airbus could complement Korean Air in terms of technical issues as well,’’ they added.
The delay of the first bid will affect the entire schedule of the KF-X project. Previously, DAPA planned to choose a preferred bidder for the project next month and to announce the final winner around July.
The project involves deploying 120 fighters after 2023 to replace Korea’s aging fleets of F-4s and F-5s. The country’s largest-ever defense program is expected to cost nearly 20 trillion won, including the 8.5 trillion won development project.
By Seo Jee-yeon (jyseo@heraldcorp.com)
