Bids submitted for South Korea fighter jet deal

South Korea said it had received two bids on Tuesday for a multi-billion dollar fighter jet contract, with foreign makers Airbus and Lockheed Martin each partnering with a Korean firm to submit rival offers.
The defence ministry said the two bids had been submitted to the state arms procurement agency and the winner of the 8.6 trillion won (US $7.8 billion) contract would be announced in July.
The competition pits the country's top civilian carrier Korean Air (KAL) and European aerospace giant Airbus, against a rival bid from Korean Aerospace Industries (KAI) in partnership with US firm Lockheed Martin.
The KF-X fighter project is designed to develop and produce 120 fighter jets of a new "indigenous" type to replace South Korea's ageing fleet of F-4s and F-5s.
The South Korean government would provide 60 percent of the jets' development costs, with the rest to be shared by Indonesia, as a result of a bilateral defence treaty, and the winning consortium.
Some experts see the KAI-Lockheed alliance as having the upper hand, as the same partnership developed the T-50 trainer, which is South Korea's first homegrown supersonic aircraft.
Lockheed, which won a contract in 2013 to sell 40 F-35A joint strike fighters to South Korea, has promised to transfer key technologies for the KF-X project to Seoul.
South Korea's military procurement needs, especially where the air force is concerned, have overwhelmingly been met by US suppliers in the past -- a reflection of their close military alliance.
KAL, however, said it would strengthen its bid with technical support from Airbus, which is part of the European consortium that developed the Eurofighter.
Korean Air currently operates aircraft maintenance workshops for both the South Korean and US air forces.
In a statement Tuesday, KAL described Airbus as "the most suitable partner" for the project, saying the European company had a strong commitment to transferring core technology to South Korea.
"Through cooperation with Airbus, we will develop an indigenous model, which is superior to the Eurofighter," it said.
Airbus has made a number of bids for the South's military contracts, including a $1.38 billion deal to provide air refuelling tankers.
Assessment of the two KF-X bids will be based on technological capabilities and price.
The defence ministry's request for the project requires a new design, although experts say either bidder might opt for a heavily modified version of an existing fighter model.