Philippine FA-50 Golden Eagle Acquisition Blues

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


The FA-50 Golden Eagle. Photo courtesy of Korea Aerospace Industries thru Flickr.
The FA-50 Golden Eagle. Photo courtesy of Korea Aerospace Industries thru Flickr.

In a speech at the Manila Overseas Press Club Forum last August of 2013, Philippine Air Force (PAF) Lt. Gen. Lauro Catalino Dela Cruz announced that formal negotiations for the acquisition of twelve 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 two Geagles delivered by the end of the fourth quarter of 2014 with the rest to be delivered in the middle of 2015.1 However, five 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 third Quarter of 2014.2

  • September 4, 2013Department 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.3

  • 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 …”4

  • 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 2014.5

‘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:6

  • 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 one to 1 1/2 months delivery, but KAI is insisting on a six 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.

‘Show Stopper’
However, the 2nd issue seems to be quite tricky, and could probably what is called a SHOW STOPPER. I feel that a one to 1 1/2 month lead time for spare parts that the DND is asking for is reasonable, but the six 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 PAF will have aircraft grounded and unable to fly for half a year.

‘Inventory Issue’
If the PAF will agree to that six-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 two 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 six 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.

‘Ultimatum’
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 six-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 five 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.7 Any further delays could possibly help gather momentum for such calls.

‘Parting Shot’
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 …

Will the FA-50 Take Off for the Philippines? Photo courtesy of Korea Aerospace Industries thru Flickr.
Will the FA-50 Take Off for the Philippines? Photo courtesy of Korea Aerospace Industries thru Flickr.

SOURCES:


Revision History:
(1) December 7, 2013: Originally posted
(2) March 1, 2014: Removed “BLOG UPDATES” section, added link to the timeline of the FA-50 acquisition; Updated Footnotes to the latest standard.


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23 thoughts on “Philippine FA-50 Golden Eagle Acquisition Blues”

  1. haiiii..buti na lang tuloy ang papunta ko ng canada..wala talaga may makuha sa gobyerno natin dito..tama nga mga palpak at walang malasakit sa Armed Forces natin.. tingnan nyo na lang dun ang mga marines na nagbabantay sa spratly pareang mga basang sisiw kasi kulang sa suporta…..its another failure of our Goverment and i hope this nancy binay and baizon will guard those EEZ of ours also together with Gazmin,,they are nothing and no contribution with our economy and modenazation… back off all of you……

  2. Guys, guys, all I can say now is DON’T PANIC.

    First of all, its still not final, we still have a couple of weeks before we will know for sure if the deal will push thru or not.

    Second, the fault is not with the government, it is with the unreasonable demands of the supplier. The government cannot agree to such unfavorable terms, LALO LANG SILANG KUKUWESTIYUNIN NIYAN if they agree to it.

    Third, I am sure that the Lead In Fighter Trainer program will push
    thru with or without KAI and their FA-50. If we do get a less capable LIFT, then it will only DRIVE THE PhAF MORE to get an MRF …

    1. I say just junk the deal if they have unreasonable demands. The Philippines should just buy real fighters and train our pilots abroad rather than waste money on trainers. Buy the Netz , Kfirs or better yet buy jets from Russia if we are having problems with approval from the US congress. Buy a real fighter!

    1. No, we will still need Advanced Jet Trainers even if we get the Gripen, so better just buy one of the alternatives to the FA-50 AND THEN buy the Gripen, or whatever aircraft we can afford.

    2. The Gripen costs 60+ Millions USD on a flyaway cost, not to mention we have to negotiate for parts and service for a considerable years. Include also the support facilities you need on ground, flight, maintenance, administrative crews with it. I would love the PAF to own the Grippens who doesn’t, but the budget set has actually sealed the faith of our PAF. Blame it all on the Legislators who decided the 85B pesos for five years was sufficient.

  3. i think the demand of KAI is understandable. if we will get only the T-50 pure trainer version, the demand of KAI regarding downpayment and spare parts 6 mos. requisition will not be that as strict. we should remember that the FA-50 is a fighter version and more complicated to produce than the T-50. Further, the FA-50 is not yer for mass production and we have conflict of schedule with the SKAF with an order of 80 FA-50 which a contract has already entered with KAI.
    practically our demand for only 12 FA-50 and still without a contract will not be given preference. korea maybe a good friend but they would not risk of entering business with us which we are not determine to pursue just because of restriction in our policy.
    another thing our corrupt politicians are making difficult for the military to acquire the FA-50 but has made a slow progress of addressing corruption in govt.

    1. Despite the relative low volume of our order, we are still a PAYING customer, and if KAI doesn’t appreciate our business, I think it is better for us to take our business elsewhere where we would be better appreciated.

  4. i agree with you. looking for contenders after the FA-50, choosing with m-346 and bae hawk i prefer the bae hawk although its not as fast as the fa-50 and m-346 but it has already a proven workhorse and reliability. with more than 1,000 flying we can be assured for spare parts and it is only worth 18m-20m much cheaper than the FA-50 and M-346.

    what fascinated me with the bae hawk, not only it can carry the 30mm aden cannon and sidewinder, it can carry also the ASRAAM and sea eagle sea skimming anti ship missile (with maximum range of 110 km) and other ground attack munitions. further, its airframe is capable of +9g. so it can work as a light fighter, ground attack and naval attack aircraft more versatile than FA-50 and M-346.

    1. The difference between the Hawk/L159 and the Master is between RADAR and SPEED, because the Hawk/L159 has radar but slow speed while the Master has speed but no radar. In this case, I would prefer RADAR as it goes a long way to improving navigation, aircraft detection, ship tracking, etc. In other words, radar helps a LOT an aircraft in its combat role …

  5. I have a hunch that down payment and delivery of parts was not the real reason for holding back the contract.Caused in the first placed usually the prospect supplier always provide all the details of the terms of payment,warranty and delivery of spare parts.The government supposed to knew this methods already.Thinking of that situation were the reasons that hinder the transactions of the FA-50 is unbelievable.My opinion there is an ulterior issue behind all of this.

  6. hindi ko maintindihan ang Korea. palaging talo ang T-50 sa lahat ng competition na sinalihan nila, eto ngayon ang Pilipinas nagtitiwala sa kakayahan ng FA-50 kahit hindi pa ito subok. dapat nga gumawa pa sila ng paraan para mas mapadali ang pag bili natin dahil 1st export customer tayo at hindi malayong sa atin manggaling ang 1st combat use nito, malaking tulong iyon sa marketing nila,,baliktad ang nangyare hindi ko maintindihan.

  7. yes I agree with you..they must prefer to give us those fa50 for a cause and customer related business so other philippines will be their model country as primary user and even a chance to combat chinese jets..or the problem is in the philippine government and nedd kickback or even pressure by china to korea not to sell this fa50 to philippines.

  8. i dont even know what president Pnoy thinks from now on…. but for me, it’s better to prioritize this procurements of 12 FA50 and 2 new frigates and it’s really BADLY NEEDED somehow…very year Chinese is more and more aggressive to comply with what they are going to do with all this spratly and even those with the east asia side of senkaku island of japan although japan has plenty of defense hardware to face those china and how could we Filipino’s? those two defenseless gregorio class frigate? God Bless the Philippines

    1. The Del Pilars are not really defenseless, in fact they have pretty good defense against missiles. It could be better, but right now they have the Super Rapid Blooming Chaff (SRBOC) to confuse missiles, and their 76 mm guns have Proximity Fuse that can shoot down missiles also.

  9. If I was a prudent aircraft customer, I would have alternatives I can readily shift to. If KAI cannot fulfill my requirements, then as any customer I’ll take my money elsewhere or reduce my order.

    I think there is a high chance that we would see an illegal Chinese ADIZ over the West Philippine Sea (WPS). It doesn’t help the Chinese ambassador to Manila gave us a sneak preview.

    Time is of the essence gentlemen and I hope the government understands that. It will take years to field competent naval surface combatants and much more to integrate modern C5I systems. We need planes ASAP, in the air and conducting combat air patrols.

  10. how about try the british at least the hawk is a reliable jet trainer/attack aircraft. it maybe slow but its agile. the hawk
    T2 system was made to resemble the new main stay of RAF Eurofighter typhoon.

  11. The Philippines should push through with the purchase of 12 FA-50 figther jets….. I believe we can produce an Ace Pilot with this hi tech fighter jets…. just give the 52% downpayment so that Kai will begin building our figther jets now na….!

  12. My cousin has a neighbor that is currently a scholar of the Philippine government in the USAF academy and is doing pretty good. If this does not push through he wont have a plane to pilot at all. If we are on a budget then we get what we can afford. We should get the KFIRS or at least the netz with acm training from the Israelis.

    1. The Philippine Air Force does have aircraft, just not as good as the FA-50. If the purchase of the Fighting Eagle will not push thru, we will just buy something else, like the M-346, for example.

      1. What I meant is he will be over trained. He would be exposed to the most sophisticated aircraft but when he comes home he would be piloting s211’s, ov10’s, c130’s. Maybe used f16’s are not a bad idea after all.

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