Exclusive: South Korea nearing decision to buy F-35 fighters

Wed Oct 23, 2013 2:31pm EDT
 
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By Andrea Shalal-Esa and Joyce Lee

WASHINGTON/SEOUL (Reuters) - South Korea is nearing a decision to buy some Lockheed Martin Corp F-35 fighter jets, but will likely keep its options open for a limited purchase of Boeing Co's F-15, sources familiar with the country's fighter competition said on Wednesday.

South Korean officials could announce their plans as early as November to secure the funding needed to ensure initial deliveries of the F-35 in 2017, according to multiple sources who were not authorized to speak publicly. They cautioned that the decisions were not yet final, and an announcement could still be postponed if the decision-making process hits a snag.

South Korea's fighter competition has been closely watched given its importance to Boeing, which is keen to extend its F-15 production line beyond 2016, and to Lockheed, which is trying to drive down the price of the F-35 by securing more buyers.

Boeing's new F-15 Silent Eagle model was the only bid that came in under South Korea's budget cap of 8.3 trillion won ($7.2 billion). However, Seoul last month rejected that offer and said it needed a fifth-generation warplane that is nearly invisible to enemy radar - a move widely seen as an endorsement of the F-35.

Europe's Eurofighter also plans to bid again for the order, but the head of Europe's EADS acknowledged last month that the company faced a tough battle against its U.S. rivals.

South Korean officials have said they are examining a mixed procurement approach that could help Seoul maintain sufficient numbers of fighters in its fleet if the F-35 runs into further delays. They are also looking at scaling back the size of the order to 40 or 50 planes.

Analysts say Boeing is now offering Seoul a range of options for an upgraded F-15, instead of the more expensive Silent Eagle variant the company initially proposed, although the Silent Eagle version remains an option.

South Korean officials are under pressure to commit to at least some F-35 purchases soon, given their own budget deadlines, and the need to start buying certain "long-lead" materials needed for any jets that would be delivered in 2017.   Continued...

 
The fourth U.S. Air Force F-35A Lightning II aircraft arrives at the 422nd Test and Evaluation Squadron at Nellis Air Force Base, Nevada in this April 24, 2013 photo released on May 8, 2013. Daniel Hughes/U.S. Air Force/Handout via Reuters