Indonesia Buying 16 S Korean T-50 Trainers

Korea Aerospace Industries (KAI) signed a $400 million deal to sell 16 T-50 Golden Eagle supersonic trainer aircraft to Indonesia, marking the first overseas sale of the $20 million jet co-developed by Lockheed Martin.

The deal obligates South Korea to buy Indonesian-built CN-235 transport airplanes, Seoul and Jakarta government officials confirmed.

Officials with KAI and the Defense Acquisition Program Administration (DAPA) officials had denied that the trainer deal would require the airlifter purchase.

The contract was signed May 25, about a month and a half after Jakarta picked KAI as the preferred bidder for its trainer jet acquisition. The T-50 beat out Russia's Yak-130 and the Czech L-159B.

KAI is set to deliver the jets to the Indonesian Air Force by 2013.

The day after the T-50 announcement, KAI received approval from the Korea Exchange to proceed with an initial public offering (IPO) estimated to be worth about 576 billion won ($523 million).

The state-owned Korea Finance Corp. owns 30.1 percent of the aircraft maker, while Samsung Techwin, Hyundai Motor and Doosan Infracore hold 20.5 percent apiece.

The IPO may be held by the end of June.

Industry and securities sources expect KAI to sell 36 million shares at 14,000 won to 16,000 apiece.

"I'm very happy that the deal has been concluded before the planned IPO," said KAI President Kim Hong-kyung. "This Indonesia deal is just the starting point for the country's aircraft exports. As the leading aerospace company in South Korea, we will make best efforts to help the country become the world's top seven aircraft exporters by 2020."

South Korea will become the sixth country to export supersonic jets, following the U.S., Russia, the U.K., France and Sweden, according to a KAI-DAPA news release.

The single-engine T-50 plane has digital flight controls and a modern, ground-based training system. It is designed to have the maneuverability, endurance and systems to prepare pilots to fly next-generation aircraft such as the Eurofighter Typhoon, the F-22 Raptor and the F-35 Lightning II. The jet has a top speed of Mach 1.4 and an operational range of 1,851 kilometers.

The news of the offset provision confirmed what Amir Sambodo, special staff for the Indonesian Coordinating Economic Minister told the Jakarta Post on May 20: "There have been talks that if Indonesia buys T-50s, there will be compensation for Korea to purchase CN-235s."

Sambodo said South Korea would buy two or four more CN-235s.

"This needs to be increased to mutually benefit both countries. If South Korea is good at trainer jets, we are strong in transport aircraft," he said.

Seoul and Jakarta had a similar barter trade deal in 2001, when South Korea bought eight CN-235 transport planes in return for selling 12 KT-1 Woongbi basic trainers.

The CN-235 is a medium-range twin-turboprop airplane, jointly developed by Spain's CASA and Indonesia's PT DI. The plane is used for VIP transport, maritime patrols, airlifts and troop carrying.

South Korea has 20 CN-235s, 12 built in Spain and eight in Indonesia. Under a 2008 deal, PT DI plans to deliver four more CN-235s to South Korea's Coast Guard by year's end.

Recently this year Korea roled out the new armed version of  its T-50 supersonic trainer aircraft, designed to carry out entry-level tactical training missions, according to the state military acquisition agency.The armed variant of the T-50, the nation’s first homegrown trainer jet, is intended to train fledgling military pilots on air-to-air and air-to-surface missions before their full operational deployment, the Defense Acquisition Program Administration said.

The TA-50 can mount precision-guided weapons such as AIM-9 Sidewinder air-to-air missiles and TGM-65 Maverick air-to-ground missiles, according to DAPA officials.

The final unit of the TA-50 will be delivered by 2012. DAPA officials refuse to confirm the total number of the TA-50s to be put into operation, citing security reasons.

From 2013, the country will also begin deploying a more heavily armed version of the TA-50. Named the FA-50, the multi-role fighter jet is designed for light attack combat missions, officials said.

Jointly developed by Korea Aerospace Industries, the country’s sole aircraft maker, and U.S. defense giant Lockheed Martin, South Korea unveiled the T-50 “Golden Eagle” in 2005.

In order to strengthen aerial defense capabilities and develop the local aviation industry, the country has spent 2.2 trillion won ($1.96 billion) on the T-50 project over eight years, starting in 1997.

After the first T-50 was delivered in December 2005, the Air Force began training with the T-50 in April 2007. The T-50 has a maximum speed of mach 1.5, with a maximum range of 800 nautical miles.