South Korea Postpones Choice of Fighter Jet to Update Aging Fleet: WSJ

Tuesday, September 24, 2013 As of 6:50 AM EDT

By Jeyup S. Kwaak

The Wall Street Journal

SEOUL--South Korea postponed a decision on a multibillion-dollar fighter-jet contract, further delaying the update of its aging fleet and dealing a blow to Boeing Co., which had been expected to win the deal.

Seoul's Defense Ministry said Boeing's revamped version of its F-15, the sole contending aircraft to fit under South Korea's budget cap, fell short of necessary requirements.

Ministry spokesman Kim Min-seok said a majority of the final evaluation committee voted against the F-15 Silent Eagle at a meeting Tuesday. He cited threats from North Korea and "rapid advances in aviation technology" as reasons for the decision.

Rival bids from Lockheed Martin Corp. and the Eurofighter consortium were effectively disqualified last month for exceeding the budget cap of 8.3 trillion won ($7.7 billion) for 60 aircraft. Since then, the government has faced criticism from pundits, politicians and even a group of former air-force commanders for the expected purchase of the F-15SE--which they deem a lesser plane that will prove ineffective in neutralizing North Korean defenses.

The F-15SE is an upgrade of one of the best-selling fighter-jet platforms in the world, but Boeing has yet to secure any orders. The new model touts improvements in aerodynamics, avionics and "stealth" capabilities that make it less visible to radar. The order would have extended work at Boeing's St. Louis production line into the next decade, the U.S. company has said.

South Korean critics of the jet generally favor Lockheed Martin's freshly developed F-35. It is touted as the world's most advanced combat aircraft and is considered by many to have the most effective stealth capabilities among the three jets that were under consideration--but it has been saddled by cost overruns, glitches and delays.

Competitive pressure from nearby China and Russia, which are developing fifth-generation stealth jets of their own, also fueled critics' angst. Japan has ordered 42 F-35s, the first four scheduled for delivery by early 2017.

Seoul will take its procurement plans for 60 new aircraft back to the drawing board; reorganizing the process could take a year, the ministry said.

Concerns about South Korea's air capabilities are likely to grow with the latest delay: Its fleet of fighters dates back to the 1960s and '70s, and the expected 2017 delivery for the F-15 was already three years behind the original schedule. The bidding took more than a year.

Representatives for Boeing, Lockheed Martin, and the European Aeronautic Defence & Space Co. couldn't be immediately reached for comment.

Source:  http://online.wsj.com