Gov't opts for KAI-Lockheed team in $7.8BN fighter jet deal

The government has named Korea Aerospace Industries (KAI) and its U.S. partner Lockheed Martin as the preferred bidder for an 8.6 trillion won ($7.8 billion) project to develop an indigenous fighter jet by 2025.

The state Defense Program Acquisition Administration said in a press release on Monday that the national defense acquisition program committee, presided over by Defense Minister Han Min-Koo, made the decision.

The project is designed to develop and produce 120 fighter jets of a new, indigenous type to replace South Korea's ageing Air Force fleet of F-4s and F-5s. It has been about a decade behind schedule due to budgetary and feasibility issues.

The KAI-Lockheed alliance beat the Korean Air-Airbus team in a two-way competition to win the country's largest-ever procurement deal.

The Defence Ministry also approved a separate $1.28 billion deal to buy Patriot Advanced Capability (PAC)-3 missiles and to upgrade its air defence system aimed at intercepting North Korean ballistic missiles.