South Korea unlikely to finalize Lockheed F-35 order until summer '14

Reuters News
Posted: Dec 20, 2013 10:44 PM
South Korea unlikely to finalize Lockheed F-35 order until summer '14

By Andrea Shalal-Esa

WASHINGTON (Reuters) - South Korea is unlikely to finalize any orders for the Lockheed Martin Corp F-35 stealth fighter jet until the summer or fall of 2014, after it redoes a complicated acquisition process, according to three sources familiar with the issue.

South Korea's military chiefs last month said Seoul would buy 40 Lockheed F-35 fighters, with the first planes to be delivered in 2018, despite the fact the only Boeing Co's F-15 fighter met the competition's price target.

They say an additional 20 fighters to be acquired could be different models.

Europe's Eurofighter also bid for the order. Both Boeing and Eurofighter have said they remain willing to supply smaller numbers of jets to Seoul, if asked.

The sources said the military chiefs' decision requires Seoul to redo part of its acquisition process and also take another look at the budget, which in turn will defer any move to finalize F-35 orders until the second half of 2014, months later than expected.

Despite the delay, South Korea is not expected to change the decision to buy F-35s, still seen as the only planes that meet the country's stealth requirement, the sources said.

"They have to file another request with the defense acquisition board, which could push it out through the summer or fall of next year," said one of the sources, who was not authorized to speak publicly. "But the F-35 is still the only plane that meets their stealth requirement."

A second source agreed. "So far, the process is that the F-35 is the only one that meets the requirements. They are pursuing the F-35 with all effort and speed," said the source, who was not authorized to speak publicly about the government-to-government sale.

U.S. officials had expected South Korea to order jets as part of a ninth production batch of F-35s, for which an advanced procurement contract will soon be issued, but the delay means Seoul's orders will fall back into the 10th lot of jets, said one of the three sources.

Lockheed last month said it would abide by its commitments to a range of offset projects, including construction and launch of a military communications satellite, that were submitted as part of the F-35 offer, despite the reduced order quantity from 60 to 40.

(Editing by Robert Birsel)