Boeing Loses Ground on $7.7 Billion South Korea Deal
Boeing Co. (NYSE:BA) has lost its lead in the race for a deal to supply South Korea’s military with its F-15 Silent Eagle fighter jets. The deal had been considered a front runner over alternative offers from Lockheed Martin (NYSE:LMT) and Typhoon (TYPFF.PK) as it was the only option that came in under budget, but public pressure to invest in more advanced planes has caused the South Korean government to reconsider, Reuters reports.
Earlier this month, Reuters reported that Boeing was likely to secure the deal as its offer was the only option that came in under budget. A source familiar with the talks told Reuters at the time that South Korean president Park Geun-hye may have been reluctant to update the country’s aging fleet at all as she pledged a great deal of money for social projects that helped her win the presidential election last year. So the decision to abandon the least expensive offer on the table was considered a surprise.
Now Lockheed Martin’s F-35A plane looks more likely to secure the deal for 60 fighter jets to update South Korea’s military aircraft. The main reason that Boeing has lost the $7.7 billion deal is the F-15′s lack of stealth abilities. Lockheed Martin’s F-35A is considered a high-stealth craft.