New developments have emerged regarding the KF-21 "Black Eagle" fighter jet program-nominally a joint project between South Korea and Indonesia-as Indonesia has decided to abandon its initial plans for joint production and domestic assembly in favor of potentially purchasing complete aircraft directly.
According to a report by *Defense News*, Yusuf Jauhari, the head of the Indonesian Defense Facilities Agency, revealed to the media late last month that the plan for domestic production of the KF-21 would "not materialize." This confirms earlier speculation that the original cooperative agreement-which entailed Indonesia assembling and producing the KF-21 domestically-had been scrapped.
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(File photo) A model of the KF-21 (then known as the KF-X, or IF-X in Indonesia) featuring the Indonesian Air Force livery.
The KF-21 is a next-generation fighter jet developed under the leadership of Korea Aerospace Industries (KAI) to replace the South Korean Air Force's aging F-4 Phantom and F-5 Tiger fleets. It features a conventional aerodynamic layout and a "semi-stealth" airframe design. Indonesia signed an agreement with South Korea as early as 2010 to co-develop the aircraft, which was then designated the KF-X. Under the initial agreement, Indonesia committed to covering 20% of the development costs-amounting to approximately 1.6 trillion won (roughly US$1.3 billion or 9.02 billion RMB)-with full payment scheduled by 2026. In return, South Korea was to transfer a flight-test prototype and relevant technology to Indonesia, enabling the state-owned enterprise PT Dirgantara Indonesia (PTDI) to manufacture 48 KF-21 Block I aircraft at its Bandung facility.
However, the partnership encountered numerous setbacks along the way. Due to various reasons, Indonesia consistently failed to make timely and full payments for development costs; by February 2024, less than 17% of the total amount had been paid. Furthermore, in May 2024, South Korean media reported that Indonesian engineers participating in the development program had attempted to leak project secrets, an incident that sparked a diplomatic dispute. Indonesia had at one point requested an extension of the full payment deadline to 2034, but South Korea rejected this, citing potential disruption and delays to production and deployment schedules. Ultimately, the two nations agreed to adjust their cost-sharing ratios; Indonesia's financial contribution was significantly reduced to 600 billion won (approximately 3.186 billion yuan), a move that inevitably entailed a substantial narrowing of the scope of the technology transfer agreement. Throughout the project's previously chaotic progress, details regarding the joint production aspect had long been kept under strict confidentiality.
In April of this year, Indonesian authorities revealed that domestic production of the KF-21 was no longer moving forward, and by late June, the government officially confirmed the cancellation of the domestic production plan. Nevertheless, Indonesia has made payments based on its reduced share in exchange for the transfer of a single-seat prototype, and officials have indicated a preference for purchasing complete aircraft directly.
Meanwhile, although purchasing the KF-21 remains a key option for Indonesia, official sources reportedly suggest that contractors capable of offering more attractive technology transfer agreements may stand a better chance of winning the contract. In 2022, Indonesia signed a contract with France to purchase 42 Rafale fighter jets; a handover ceremony for the first six aircraft took place this May, and officials are considering the purchase of an additional 24. Furthermore, in April, Indonesia signed a loan framework agreement with Turkey that included an intent to purchase 48 KAAN stealth fighter jets, with a total value of $10 billion.
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On May 18 of this year, a handover ceremony was held for Indonesia's first six Rafale jets and other new equipment, attended by Indonesian President Prabowo.
The shifts facing South Korea's defense export sector do not end there. Just this Monday, it was announced that the Type 212CD submarine from Germany's ThyssenKrupp Marine Systems (TKMS) had won the Canadian Navy's project for new conventional submarines, meaning that the KSS-III proposal from South Korea's Hanwha Ocean-which had also reached the final round of competition-was unsuccessful. In March of this year, the South Korean Navy deployed a vessel nearly identical to its bid offering-the KSS-III-to Canada for a visit and joint exercises. This unprecedented long-range voyage by the South Korean submarine force was clearly a promotional move aimed at securing a major submarine contract from Canada, specifically to gain an edge over its ultimate rival, Germany.
However, the promotional effort ultimately came to nothing. After losing out on this massive contract-which could have involved the construction of up to 12 submarines-Hanwha Ocean saw its stock price plummet amidst market volatility, suffering a staggering 23% drop this past Tuesday.
