Korean Air goes head to head with KAI

Social Affairs

Published: 22 Feb. 2015, 20:36

Korean Air goes head to head with KAI

Korean Air Lines (KAL) and Europe’s Airbus Defense and Space have signed a memorandum of understanding (MOU) on a joint bid to develop a Korean-built fighter jet, codenamed the KF-X project, an airline industry source said on Sunday.

This puts the country’s largest commercial airliner in competition with the state-funded Korea Aerospace Industries (KAI) in an upcoming second bidding process for the country’s largest project to develop new mid-level fighter jets.

KAL signed an MOU with Airbus, the builder of the Eurofighters, on Feb. 16, according to the airline official, who added that it also laid out “the scope of technological cooperation in future project planning.”

KAI submitted its bid in cooperation with U.S. defense giant Lockheed Martin as the sole competitor in the first round of bidding on Feb. 9.

KAL which adamantly expressed its desire to participate in the KF-X project at the end of last year, however, was unable to conclude talks with Airbus in time to participate in the first bid.

The 8.5 trillion won ($7.7 million) KF-X project calls for replacing Korea’s aging fleet of F-4s and F-5s through the development of new F-16 fighter jets.

Analysts anticipate competition between American Lockheed and European Airbus to be intense in the bidding process Korea’s largest-ever procurement program.

While KAI appears to have the upper hand in terms of technology and preparation, particularly with its experience developing T-50 advanced jet trainers and its partnership with Lockheed Martin, Korean Air has stronger investment abilities.

Still, KAL has no experience developing fighter jets.

“KAI developed and is exporting its supersonic advanced trainer T-50 and maintains a cooperative relationship with Lockheed Martin, which developed the F-35 fifth-generation fighter aircraft,” a Korean military official said. “Ultimately, key competition would be over how closely KAL, which has been touting its financial strength, will cooperate with Airbus, and what sort of unexpected offers they will participate [in the bidding] with.”

The Airbus Group, headquartered in the Netherlands, is a multinational aerospace and defense corporation and was founded as the European Aeronautic Defense and Space Company in 2000.

First announced in 2001, the KF-X project was initiated to produce new multirole fighters with more advanced capabilities than the U.S.-built F-16s. The new combat aircraft will be known as 4.5-generation fighter jets, while the 40 F-35s stealth fighter jets that Korea decided to purchase are considered fifth generation.

The government will invest 18.1 trillion won ($16.94 billion), including 8.5 trillion won for development, in the KF-X project.

BY SARAH KIM, JEONG YONG-SOO [sarahkim@joongang.co.kr]