Korea Aerospace Industries (KAI) / Lockheed Martin FA-50 light attack fighter jet

The FA-50, the nation's first domestically developed light attack aircraft, is competing against the Pakistani-Chinese jointly manufactured JF-17 fighter for the Malaysian Air Force's Light Combat Aircraft (LCA) program, under which Kuala Lumpur seeks to purchase 18 jets to replace its aging MiG-29 fleet, according to sources, Sunday.

"Despite interest from a diverse group of manufacturers, the FA-50 and JF-17 are the finalists," the source said.

The FA-50 is a variant of the T-50 supersonic trainer jet, manufactured by Korea Aerospace Industries (KAI).

Since its first deployment in October 2013, 60 FA-50s are operated by the Korean Air Force. In addition, the FA-50 has been exported to Iraq, the Philippines and Thailand.

Initially, France's Rafale, the multinational Eurofighter and the United States' F-18 were put forward for the Malaysian program, but the project has been downsized to purchasing light attack aircraft due to budget issues, giving a fighting chance to India's TEJAS, Italy's M346 and Russia's Y-130.

Should the KAI win the deal, it would be a huge compensation for its failed exports to Argentina.

Despite interest from Buenos Aires, the KAI, which uses several British-made parts in the FA-50, was unable to close a deal for the sale of eight aircraft due to an arms embargo imposed by the British government on the South American country.

However, the FA-50 is reportedly behind the JF-17 in the race as the latter possesses a better mid-range weapons capacity which is a requirement of the Malaysian Air Force.