Korea Aerospace Industries, which manufactures the T-50 supersonic trainer jet, has been selected as the preferred bidder for Indonesia's next trainer jet project. The deal brings to fruition Korea's long-held dream of exporting the Golden Eagle. The government hopes to sell 16 T-50 jets to Jakarta for US$25 million each, totaling $400 million.
The T-50 is no ordinary trainer jet. Developed jointly by KAI and Lockheed Martin since 1997 at a cost of W2.08 trillion (US$1=W1,095), it is the world's first supersonic trainer jet. Its state-of-the-art equipment has enabled it to complete 3,000 flights so far without malfunctions. But the high price tag has proved its Achilles heel, leading to defeats in several bids over the last four years. The T-50 is about 10 to 20 percent more expensive than jets of the same class pitched by other countries. In 2009, the United Arab Emirates chose Italy's M-346 over the T-50 and Singapore did the same last year.
Whether the upcoming negotiations will clinch the deal will hinge on the final price and the extent of technology transfer as well as parts supply. The government and KAI plan to pull out all the stops to ensure the negotiations progress smoothly. The leaders of Korea and Indonesia have pledged to boost exchanges in other types of armaments, including submarines and communications devices. Considering Indonesia's vast natural resources, the success of the T-50 export deal becomes even more crucial in future relations between the two nations.
The deal will be a chance to advertise Korea's prowess in the global aerospace industry. If it proves a success, it will help open other markets such as Israel and Poland.
The deal will also catalyze the development of a new growth industry in Korea. The aerospace industry brings together cutting-edge technology in the fields of electronics, electrical engineering and materials and requires 100 times the level of precision that goes into manufacturing cars. Around 200,000 parts go into each trainer jet, and this means new business opportunities for Korea's parts makers and other related industries.