Korea’s KF-21 Market Could Shrink as Indonesia, Saudi Arabia & Malaysia Gravitate Towards Turkish KAAN Fighter Jet

South Korea’s KF-21 fighter project is at risk of losing Indonesia, its 20% partner in the venture, besides potential customers -Malaysia and Saudi Arabia, all of which have evinced interest in joining the Turkish  KAAN Jet in recent months.

At the LIMA show in Malaysia last week, Korea Aerospace Industries(KAI) CEO Kang Goo-young told Korean reporters, “deteriorating ties with Jakarta could shift the regional dynamic. He pointed to Indonesia’s growing interest in co-developing Turkey’s next-generation fighter, the KAAN, and said that if Malaysia also were to join such an initiative, it could complicate South Korea’s broader ambitions in Southeast Asia,” Korea Herald reported.

Turkish Aerospace expects to swing  Indonesia, Malaysia and Saudi Arabia to its side

Meanwhile, Turkish Aerospace Industries (TAI) is upbeat about Indonesia and Malaysia joining the project. “Saudi Arabia has been interested for a long time, their interest is at the highest level right now. The Indonesian side is also doing well," its General Manager Mehmet Demiroğlu told reporters on May 24 during a TAI factory visit.

He further said that requests have been received from countries such as Kazakhstan and Malaysia (to partner in the KAAN fighter project) and that the agreement phase has been reached with some countries.

While the KF-21 project has entered the serial production stage and the first aircraft are expected to be delivered to the Korean Air Force in 2026-27, the KAAN fighter is currently in the prototype testing stage. and deliveries to the Turkish Air Force are expected from the 2028-2029.

However KAI is hopeful that it will swing Malaysia to get interested in the KF-21. At LIMA 2025, a high-ranking Malaysian official visited the KAI booth during the exhibition and asked how the KF-21 compares with China’s J-10 fighter. On May 7, a Pakistani J-10 reportedly shot down a Rafale fighter from the Indian Air Force, which had acquired the jets from France.

In that conversation, Kang said he positioned the KF-21 as a cost-effective but high-performance alternative to European fighters. “Compared to 4.5-generation jets like the Rafale or Eurofighter, the KF-21 delivers 150 percent of the performance at 70 to 80 percent of the cost,” he told the official.

 Indonesia upset with South Korea

However, Indonesia is a different story. The partnership with South Korea has soured since 2023, when several Indonesian technical researchers were caught attempting to remove sensitive files from the joint development site in Korea using an unauthorized USB device.

Five of the personnel are under investigation and remain banned from leaving the country, which is believed to be a source of growing dissatisfaction in Jakarta.

Indonesia still owes about 200 billion won ($145 million) in development costs  which according to Kang, the Indonesian government has already budgeted the 2024 payment.

In an effort to keep the partnership with Indonesia on track, South Korea has offered to reduce the country’s share of development costs from 1.6 trillion won to 600 billion won. However, Jakarta has not officially responded.