A request for proposals for the selection of an advanced jet trainer for the Israeli air force is expected to be released no later than the first week of August.
Israel Defense Forces has started discussions over its next five-year procurement plan, and a source said that once the trainer selection gets a "line in the budget book" the RFP will be issued.
The RFP will be issued by Tor, a joint venture formed by Elbit Systems and Israel Aerospace Industries. This will purchase the selected aircraft and sell flight hours on the type to the air force.
On 14 July, Israeli sources said the demand from two rivals - the Alenia Aermacchi M-346 and the Korea Aerospace Industries/Lockheed Martin T-50 - would allow the funding of 40% of the selected aircraft using the US Foreign Military Funding (FMF) mechanism.
This is possible because the engines and some other systems for both aircraft are sourced from US industry. The Israeli defence ministry will acquire such equipment as so-called "government-furnished equipment".
The use of the FMF mechanism will also ease the direct burden on Elbit and IAI in acquiring the new fleet of aircraft.
South Korean sources said KAI has recently made efforts to match the price of its T-50 with that of the M-346.
The RFP will be answered by the two manufacturers by November, with a selection expected in March 2012.