September 20, 2013 8:26 pm

Key fighter contracts mired in controversy

Two US military contractors took key steps towards exporting fighter jets this week, but both the Netherlands’ announcement that it intends to buy Lockheed Martin’s F35 fighter and South Korea’s shortlisting of Boeing’s F15 remain mired in controversy.

Korea announced that, of three tenders it had received to replace its air force’s ageing fighter jet fleet, only one – for Boeing’s F15 silent eagle – had come within the Won8.3tn ($7.7bn) price ceiling for the tender. That should make the finalising of an order for the aircraft a formality when the country’s cabinet considers the order next week.

However, many in Korea remain opposed to the country’s not choosing the F35 fighter that both Japan, a key ally, and the United States will be operating in future. The F15 is a significantly less advanced fighter than the F35. There has been speculation that the cabinet will decide to postpone the decision while holding further talks on how to proceed.

An order that Lockheed won in Europe could be unravelling, meanwhile. Members of the Netherlands’ Labour Party - part of the governing coalition - have expressed concern about how the government came to opt to spend €4.5bn on 37 F35s. That could force the government to back away from the order, announced on Tuesday.

Both the US defence department and contractors are eager to expand US military exports to counteract the effects of the US’s “sequestration” spending cuts. Without exports, contractors will have to raise prices per unit of equipment to the US government, so that orders reduced because of spending cuts still cover development costs.

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