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THE INVESTOR
January 20, 2018

Deals

KAI, Lockheed Martin to bid for W17tr defense deal in US

  • PUBLISHED :March 31, 2017 - 14:23
  • UPDATED :March 31, 2017 - 14:23
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[THE INVESTOR] A consortium formed by Korean Aerospace Industries and US-based aerospace and defense firm Lockheed Martin has decided to submit its final bid for the Advanced Pilot Training project worth 17 trillion won (US$15.20 billion) to the US Air Force on March 31. 

The APT project is set out to replace the old trainers and introduce about 350 new units. The US Air Force will conduct due diligence on participating companies from April to September with plans to select a model at the end of this year to deploy trainers from 2022 to 2032. 




According to industry sources, the deal is crucial to KAI as the contract will increase the likelihood of being selected for other follow-up deals with the US Navy from 2025 to 2030. These include 650 fighter units worth approximately 33 trillion won, and rights to export to a third party country for about 1,000 additional units approximately worth 50 trillion won. 

“In the history of Korean defense industry, there hasn’t been a deal as large as this one. This is an opportunity that cannot be missed as the initial contract could have a ripple effect that could reach 100 trillion won,” said Ha Sung-yong, CEO of KAI, at a press conference on March 30.

Another strong contender for the bid is a consortium composed of Boeing and Swedish aerospace and defense company Saab Group.

By Alex Lee (alexlee@heraldcorp.com)
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