The Indonesian Defense Ministry signed the deal on Wednesday, said Enes Park, executive vice president of KAI. The contract stipulates that the aircraft must be delivered 18 months after the signing of a loan agreement between the South Korean and Indonesian governments.
The announcement follows a 12 April letter the Indonesian government sent to KAI designating the South Korean firm as the preferred bidder to replace Indonesia's BAE Systems Hawk 53s. The letter all but sealed the fate of the T-50's rivals in the competition, the Aero Vodochody L-159 and Yakovlev Yak-130.
The 16 General Electric F404-powered aircraft will be produced at the KAI facilities in Sacheon, South Korea. They will shipped to Indonesia partially disassembled, where Indonesia state aircraft manufacturer PT Dirgantara Indonesia/Indonesian Aerospace (IAe) will reassemble them.
"The aircraft is certainly capable of being ferried, but transporting them meets Indonesian industrial regulations," says Park. "(Re-assembling) the aircraft will help them improve their capabilities."
Despite the best efforts of KAI and the South Korean government, theT-50 lost trainer competitions in both the United Arab Emirates and Singapore to the Alenia Aermacchi M-346.
The T-50 will again square off against its rival in Israel and the USA. In 2012, the Israeli Air Force will decide between the T-50 and M-346 to replaces its Douglas A-4 Skyhawk trainers. In early May, Alenia Aermacchi general manager Alessandra Franzoni said America's T-X competition to replace the 1960s era Northrop T-38C will be a two horse race between the T-50 and M-346.
Park adds that there could be a possibility of selling Indonesia the T-50's combat variant, the F/A-50. "While there have been no concrete discussions on this, there is a distinct possibility of this in the future."
Indonesia is also still involved in South Korea's proposed KF-X programme, says Park.
At the Farnborough air show in 2010, South Korea signed a memorandum of understanding with Indonesia, with the latter to potentially contribute up to 20% of the KF-X development costs. Indonesia is currently looking at how it might participate in the project.
The T-50 buy is just the latest example of Jakarta's efforts to upgrade the nation's air force. In November 2010, it purchased eight Embraer EMB-314 Super Tucano light attack aircraft to replace Vietnam War-era Rockwell OV-10 Broncos. In January 2011 it awarded Arinc Engineering Services a $66.7 million contract to modernise five Lockheed Martin C-130Bs.
Indonesia is also considering upgrading its 10 Lockheed Martin F-16A/B fighters. Media reports have said Jakarta will buy 24 ex-US Air Force F-16s, but this has not been officially announced by either Washington or Jakarta.