[Defense Commentary] Will the Korean-style Fighter Jet Be Exported?

On July 27th, a piece of good news was delivered to the domestic aviation industry. Poland, a military power in Eastern Europe, signed a basic contract to purchase Korean-made weapons worth approximately 19.4 trillion KRW, including 48 FA-50 light attack aircraft on the purchase list. If the final contract confirming the purchase is signed, it will be the first time that domestically produced military aircraft enter the European military aircraft market. This is a promising development for the future expansion of exports of domestic light attack aircraft and fighter jets.

▲ Poland, a foothold for FA-50's entry into Europe? = The news that Poland decided to purchase 48 FA-50s was announced on July 28th, Korean time. Korea Aerospace Industries (KAI) released a press statement that day confirming the signing of a basic contract with Poland for 48 FA-50 light attack aircraft. The basic contract is an agreement signed prior to the final contract (execution contract) in Poland's acquisition process, and once specific conditions such as delivery schedule, project costs, and technology transfer are agreed upon, the final contract will be signed.

Regarding this basic contract, Mariusz Błaszczak, Poland’s Deputy Prime Minister and Minister of National Defence, pointed out the low operational rate and high maintenance costs of the currently operated M-346 and stated, “The FA-50 is interoperable with the equipment we possess and is the optimal model for the Polish Air Force capable of mounting the latest armaments,” explaining the background for choosing to purchase the FA-50.

Notably, the contract size is $3 billion (approximately 3.9 trillion KRW), the largest ever in terms of quantity and price. This amount corresponds to 75% of the total number of T-50 series aircraft exported overseas so far (64 units) to countries like Indonesia, the Philippines, Iraq, and Thailand. Moreover, if the export is confirmed, it will establish a foothold for expanding exports to Europe.

Accordingly, KAI is putting considerable effort into this Polish export. According to the press release, KAI plans to first establish an FA-50 MRO center based on strategic partnerships with the Polish government and local companies and progressively secure production capabilities locally.

In the mid to long term, KAI also plans to establish and operate an international flight training school utilizing the Polish Air Force’s FA-50s. By meeting pilot training demands within the European region through this, economic revitalization in Poland is also expected, KAI stated. This likely explains why KAI President Ahn Hyun-ho described the signing of this basic contract as “the beginning of joint cooperation, not just a simple sale.”

However, the current contract is a preliminary agreement equivalent to a basic contract. This is why the Defense Acquisition Program Administration (DAPA) is cautious about officially confirming the Polish export. Therefore, detailed negotiations with the Polish government are crucial to proceed to the final contract that will confirm the export.

If the export is confirmed, it is expected to enhance competitiveness not only in expanding exports to the European market but also in the United States, which has the highest demand, Egypt, the second largest, as well as in new markets and additional procurement projects of existing importing countries.

▲ Expansion of light attack aircraft exports, a boon for fighter jet exports = As light attack aircraft exports expand, it is expected to be favorable for the export of domestically produced fighter jets in the future. The more light attack aircraft are exported, the deeper the national trust grows not only among importing countries but also in the global military aircraft market, which benefits future fighter jet exports. Particularly, trust at the national level plays a significant role in military aircraft exports. One reason why the leading countries in the global military aircraft market remain unchanged is that trust has been built up through long-term exports.

In fact, according to the report released by the Export-Import Bank of Korea (Overseas Economic Research Institute) in June, aircraft accounted for 47% of weapon exports from 2017 to 2021, and the aircraft market is dominated by three countries: the United States (50.9%), Russia (18.8%), and France (12.7%), which together hold 82.5%. Excellent technology and trust are the driving forces that lead the military aircraft market. This is why the expansion of light attack aircraft exports is important for future exports of domestic fighter jets.

▲ Changes in the fighter jet market, a green light for domestic fighter jet exports? = Changes in the fighter jet market are also noteworthy concerning domestic fighter jet exports. Especially, looking at the recent global fighter jet market atmosphere, domestic fighter jet exports are not just rosy prospects. This is because demand is expected to increase for cost-effective fighter jets, i.e., those with high efficiency relative to price, in a market dominated by high-performance fighter jets. Since fighter jets are very expensive, countries needing to purchase them naturally turn to more cost-effective options.

For example, the models currently dominating the global fighter jet market include the F-35, Eurofighter, Rafale, and Su-35, most of which are expensive 4.5 generation or higher fighter jets. The unit price mostly exceeds 100 billion KRW, making it difficult for many countries to purchase them readily.

The most notable fighter jet in the global market, the U.S. F-35A, despite a significant price drop from its initial production cost, still costs about $78 million, approximately 93 billion KRW per unit. Moreover, the European Rafale costs $113 million (about 138 billion KRW), and the Eurofighter costs $124 million (about 150 billion KRW). Additionally, these fighter jets incur high operational and maintenance costs, which is a heavy burden for countries with small defense budgets. Although most air forces worldwide operate fighter jets, these countries cannot afford to purchase expensive and high-maintenance fighter jets.

Especially as more countries need to replace aging fighter jets, this trend is becoming more pronounced. Some of these countries replace them with high-performance fighter jets, but many small and medium-sized countries cannot. This market change is driving demand for cost-effective fighter jets.

For instance, Argentina, which is pursuing a new fighter jet procurement project, saw its Chief of Staff, air force pilots, and technicians visit China and Pakistan in May and June to evaluate the JF-17 fighter jet. As is known, the JF-17 is jointly developed and produced by China and Pakistan. The latest version, JF-17 Block 3, is reported to have 4th generation plus capabilities. In contrast, its price is relatively affordable.

According to recent foreign media reports, China proposed selling 12 JF-17s to Argentina, including 10 single-seat and 2 two-seat aircraft, for $600 million (about 800 billion KRW). Dividing this simply by unit price results in about 66 billion KRW per aircraft, roughly half the price of a Rafale fighter jet. For Argentina, with limited defense funds, this is an attractive option.

The JF-17 has been sold to Pakistan, Myanmar, Nigeria, and others, and many countries including Argentina, Azerbaijan, Bolivia, Sudan, Bangladesh, Bulgaria, Peru, and Venezuela have shown interest, gradually expanding exports in the global fighter jet market. This is a significant point for Korea, which needs to export domestic fighter jets.

Kim Jae-han, Editor-in-Chief, Monthly Aviation

This content was produced with the assistance of AI translation services.