For the latest update on the FA-50 acquisition, please refer my blog about the “Philippine FA-50 Fighting Eagle Acquisition Timeline“
Revised January 20, 2014. See bottom of the page for the complete revision history
In a speech at the Manila Overseas Press Club Forum last August of 2013, Philippine Air Force (PhAF) Lt. Gen. Lauro Catalino Dela Cruz announced that formal negotiations for the acquisition of 12 FA-50 Golden Eagle (or Geagle) from the manufacturer Korean Aerospace Industries (KAI) formally started the previous month, July of 2013. He also said that their target is to have 2 Geagles delivered by the end of the 4th quarter of 2014 with the rest to be delivered in the middle of 2015. However, 5 months on and still no contract between KAI and the Philippines has been finalized.
‘Short Summary of Developments’
Just to give everyone a refresher, here is a summary of news items related to the Geagle the last couple of months:
* September 1, 2013 – The Air Defense Wing Journal showed a Pilot Qualification Training Plan for the FA-50. The plan anticipated the arrival of the FA-50 by the 3rd Quarter of 2014.
* September 4, 2013 – Department of National Defense (DND) Spokesman Peter Galvez said that the DND is still pushing thru with the plan to acquire FA-50s despite a recent crash in South Korea involving a similar aircraft.
* October 17, 2013 – A Spokesman for South Korean President Park Geun-Hye released a statement during President Noynoy Aquino’s State Visit to South Korea that said that the South Korean President, “… expressed gratitude for Manila’s selection of the FA-50 as the candidate for the Philippine jet acquisition program, and she hoped that a final contract would be signed at an early date …”
* November 7, 2013 – Defense Undersecretary Fernando Manalo in a telephone interview with the Manila Standard said that the FA-50s would be used to patrol Philippine airspace especially the West Philippine Sea where China had been intruding. Manalo also said he expects the negotiations to be completed by January 2014.
‘Major Road Blocks’
Defense Undersecretary Fernando Manalo finally relayed to the media recently that there were major hurdles affecting the FA-50 acquisition, hence the long delay in signing of the contract. Among these hurdles he specified are:
* Advance Payment – Philippine Law only allow state agencies to pay a 15 percent down payment while the rest of the amount would be paid upon the delivery of goods. However, KAI wants a 52 percent down payment. Manalo said this would only be possible if President Noynoy Aquino (PNoy) approves it.
* Spare Parts Delivery Turn Around Time (TAT) – This covers the period required for the delivery of the jets’ spare parts under a two-year warranty. The DND is requiring only a 1 to 1 1/2 months delivery, but KAI is insisting on a 6 month delivery.
The first issue seems to be relatively easy to resolve as it would only require PNoy’s approval. If the money is available, and with the good economic performance so far of this Administration despite the problems we have faced this year (Zamboanga Crisis, Bohol Earthquake, Eastern Visayas Super Typhoon Damage), I think it should be so. Also, since this will be one of his Administration’s major military purchases and thus a highlight of his Administration, there is a good chance PNoy will be inclined to give the approval.
However, the 2nd issue seems to be quite tricky, and could probably what is called a SHOW STOPPER. I feel that a 1 to 1 1/2 month lead time for spare parts that the DND is asking for is reasonable, but the 6 months that KAI is insisting on is quite unreasonable as it means if an aircraft will need a replacement of parts, then it will have to wait half a year for the problem to be resolved, providing a seriously long downtime for the Geagles.
Yes, the Geagles are brand new, and they shouldn’t break down as often as expected, but you can never tell. This aircraft has yet to enter full service with any air force, and although similar aircraft like the T-50 are already in service around the world, this is a new variant and you really can’t tell how it will perform in actual service until it is there already. What happens if they do break down, then? The PhAF will have aircraft grounded and unable to fly for half a year.
If the PhAF will agree to that 6-month TAT provision, then it will either have to accept that some Geagles might be sidelined for half a year at a time if their parts break down for some reason, or it could just stock up on parts themselves to keep downtime to a minimum. However, stocking up parts doesn’t make sense as the aircraft are still under warranty. It is supposed to be KAI’s responsibility to keep those aircraft flying within that 2 year warranty period, and it seems like they would only agree to do so if they can replace parts at their own sweet time.
If KAI has problems with delivery lead time for some parts from their sub-suppliers, or problems with production lead times on parts they manufacture themselves, then they should be the ones stocking up on those parts with lead times of more than 4-5 weeks, not the user, at least for the duration of the warranty period.
It is possible that KAI might want to compromise and settle for a turnaround time of less than 6 months but still more than what the DND is asking for, but I am not sure if the DND would agree to that. Any delay means MONTHS of downtime for such a brand new aircraft, something which is not ideal, or even right IMHO.
For me the most important line in Undersecretary Manalo’s statement was when he said that, “… they would decide whether to push through with a deal with KAI within the year …” He did not say specifically that the deal could be cancelled by then, but my interpretation is that if KAI insists on that 6-month turnaround time, then they could just very well do that, and I think the DND would make the right decision.
The negotiations have been dragging on for about 5 months now, and delaying it further means delivery times will only move farther and farther away. And more importantly, as long as no contract is signed, not only the acquisition of the Geagle but the entire aircraft acquisition project could be in danger of being ambushed politically and cancelled outright altogether. Already some politicians like Nancy Binay, a glorified Mayoral Clerk before she became Senator, has been questioning the acquisition of these Geagles as to why they are being bought instead of other military equipment. Any further delays could possibly help gather momentum for such calls.
There is a serious possibility that the Geagle purchase will not push thru, and if that happens, then there will be a major delay in procurement of new combat aircraft for the Philippines. I don’t know exactly how quickly the DND can negotiate with another manufacturer, hopefully it will be very quick as deliveries will be further delayed and at the same time make the whole acquisition plan more vulnerable to political attacks.
I wonder if KAI has given the same terms with the South Korean Air Force’s FA-50s, but I highly doubt it. Even if they did and the SKAF accepted it, it is probably due to political accommodations (KAI is a South Korean company, and the FA-50 is South Korea’s first main redesigned combat aircraft product), and the fact that the SKAF can probably afford to have trainers grounded for so long since they have a lot of aircraft in their inventory that they can use. We, on the other hand, will be relying on these dozen aircraft as our main combat aircraft until we get a better one and thus can’t afford to have such long down times, ESPECIALLY for such a brand new aircraft.
Another issue that the Philippines will have to face if the Geagle deal is cancelled is that it may have to settle for a less capable aircraft as the FA-50 right now seems to be the most capable Advanced Jet Trainer in the market. Its main rival, the M-346 Master is a less capable aircraft, and its comparison with the Geagle will be the subject of the next blog.
At any rate, we will likely know the fate of the Geagle purchase in a couple of weeks time …
^ Air Force chief: 12 fighter jets by 2016, http://www.philstar.com/headlines/2013/08/28/1144641/air-force-chief-12-fighter-jets-2016
^ Jet 14-16 Air Defense Wing Journal, September 2013, http://www.paf.mil.ph/DOWNLOADS/ADW%20Journal%20-%20preview%20(1).pdf
^ Despite crash, acquisition process for fighter jets continues, http://www.philstar.com/headlines/2013/09/04/1170271/despite-crash-acquisition-process-fighter-jets-continues
^ S. Korea To Export Light Attack Jets to Philippines, http://www.defensenews.com/article/20131017/DEFREG03/310170020/S-Korea-Export-Light-Attack-Jets-Philippines
^ Korean jets eyed to patrol WPH Sea, http://manilastandardtoday.com/2013/11/07/korean-jets-eyed-to-patrol-wph-sea/
^ DND: No consensus yet on P18.9-B fighter jets’ purchase, http://www.philstar.com/headlines/2013/12/02/1263420/dnd-no-consensus-yet-p18.9-b-fighter-jets-purchase
^ Billions for jets but no money for sat phones?, http://www.rappler.com/nation/44214-nancy-binay-yolanda-disater-response
* December 7, 2013: Originally posted
* March 1, 2014: Removed “BLOG UPDATES” section, added link to the timeline of the FA-50 acquisition; Updated Footnotes to the latest standard.