April 3, 2013 / 7:56 PM / 4 years ago

UPDATE 1-Pentagon OKs Lockheed or Boeing fighters sale to S.Korea

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* Europe's Eurofighter Typhoon also competing
    * South Korea aims to pick winner in first half 2013

    By Andrea Shalal-Esa
    WASHINGTON, April 3 (Reuters) - The U.S. Defense Department
said on Wednesday it has approved the sale of either the
Lockheed Martin Corp F-35 stealth fighter or Boeing Co's
 F-15 Silent Eagle fighter to South Korea, which is
expected to announce the winner of a 60-jet competition later
this year.
    The Defense Security Cooperation Agency, or DSCA, which
oversees foreign military sales, notified U.S. lawmakers Friday
about the possible sales to South Korea as tensions continued to
mount with North Korea. 
    The agency said U.S. warplanes would help Seoul "deter
aggression in the region," but industry executives and U.S.
government officials said the notification was unrelated to the
latest flare-up with Pyongyang or its surprise announcement on
Tuesday that it would restart a long-shuttered nuclear reactor.
    DSCA said it had notified Congress about the possible sales
of the competing fighter jets, as well as radars, electronic
warfare systems and other equipment. 
    The F-35, F-15 and Eurofighter Typhoon are locked in
competition to supply South Korea with 60 fighter planes.
Industry sources and U.S. government officials expect Seoul to
announce its decision between June and November.
    The Eurofighter Typhoon is built by EADS,
Finmeccanica SpA and BAE Systems. 
    South Korean defense officials say they hope to wrap up the
8.3 trillion Korean won ($7.43 billion) competition in the first
half of 2013. 
    The Pentagon said the Lockheed F-35 fighter sale would be
worth up to $10.8 billion, including engines built by Pratt &
Whitney, a unit of United Technologies Corp.
    One industry source familiar with the sale said the total
sum was "conservative" and the final selling price of the F-35
and associated equipment would likely be significantly lower.
    Joe DellaVedova, spokesman for the Pentagon's F-35 program
office, said the notification was an administrative requirement
that allowed South Korea to consider the two U.S. proposals.
    "Evaluations of the three competitive offers (F-35, Boeing's
"Silent Eagle" and Eurofighter) including price discussions, are
on-going," he said.
    Lockheed welcomed the congressional notification about the
possible sales, and said the F-35 would give South Korea
"all-aspect stealth with the most advanced avionics ever
integrated into a fighter aircraft providing a quantum leap in
capability over all 4th generation aircraft."
    DSCA said the foreign military sale portion of Boeing's
modified F-15 fighter would be worth up to $2.4 billion. That
includes only the direct government-to-government sale of some 
equipment for the jets, but not the actual planes, which would
be sold to South Korea as part of a direct commercial sale.
    One industry source said the total cost of the Boeing
proposal was believed to be lower than that of Lockheed's.
    Boeing declined comment on details of its proposal to South
Korea, but said it was confident that is F-15 Silent Eagle
offering was "best suited" to address Seoul's requirements.
    South Korea already operates a fleet of Boeing F-15
fighters, but the company's new Silent Eagle model includes some
stealthy -- or radar-evading characteristics.
    Boeing spokeswoman Karen Fincutter said the newest F-15
model included additional capabilities that offered Seoul "an
unprecedented blend of balanced survivability and lethality to
meet customer needs in all phases of air combat."
    Japan has ordered Lockheed's F-35 fighter, and many analysts
expect South Korea to follow suit in buying the newest fighter
jet developed. Singapore is also expected to announce an order
for more than a dozen F-35s in coming weeks, and Australia is
one of the countries helping to fund its development.
    Japan's highest-ranking uniformed officer told Reuters last
week that the F-35 was the best choice for his country's future
operational needs, citing advancement of North Korea's arms
technology in a series of nuclear and missile tests, and other

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