KAI Inks 8 Trillion Won Deal with Korean Government for KF-X Development

Korea Aerospace Industries Ltd. (KAI), the country's sole aircraft maker, will work on developing the nation’s first fighter jet model, the largest research and development project since the founding of the armed forces.

KAI said on Dec. 28 that it has signed a contract with the Defense Acquisition Procurement Administration (DAPA) on its fighter jet development project, known as KF-X.

With the start of the KF-X development project, it will accelerate replacing the Air Force's aging jets and building up the military power of Korea in the future. Once the fighter jet, which depended on imports, is developed with domestic technology, the operation and maintenance expenses will decrease while the operation rates improve. Also, it wil mark an epoch-making turning point in cutting-edge weapon system development.

The South Korean government is investing 60 percent, the Indonesian government 20 percent, and developers, including KAI, 20 percent in the project. Starting with the first flight in 2022, KAI will finish the development of the indigenous jets by June 2026.

The development project includes six flying test planes, two rescue test planes, and training and munitions support systems. In a bid to accomplish 65 percent of the localization rates, the domestic industry, academia and institutions will contribute their abilities.

KAI plans to sign a final contract with the Indonesian government in January 2016 after approving the provisional contract in November. In order to improve the nation’s air power and promote the aerospace industry, the Indonesian government will pay 20 percent of the KF-X development cost and take part in the system development tasks. One of the six test planes and technical data will be delivered to Indonesia later.

The KF-X project is expected to have great economic effects as well. Considering the market for replacing the old F-16, which sold more than 4,500 units around the world, in addition to Korea and Indonesia, Korea will be able to export 600 to 700 units of the KF-X, according to KAI.