The Chilean government had an ongoing need for a new combat aircraft. The US Government had always been reluctant to sell advanced arms to Latin America, fearing that an arms race in the region might result. But the White House ruled in 1997 that the USA would examine new arms sales to the region on a case-by-case, opening up the possiblity of arms sales to Chile. Critics of the policy reversal argued that this might lead to a new South American arms race, since Venezuela already operated the F-16.
After a protracted selection process, durinw which the JAS 39 Gripen, the Dassault Mirage 2000, the F/A-18 Hornet, and the F-16 were all considered on December 27, 2000 the government announced that the F-16C/D Block 50 had been selected.
On February 1, 2002, the commander in chief of the Chilean Air Force signed a letter of acceptance with Lockheed Martin for ten advanced Block 50 F-16C/D aircraft (6 Cs, 4 Ds), to be powered by General electric F110-GE-129 IPE engines. This was under the Peace Puma FMS program. Derived from the Block 50+ configuration intended for Greece, the aircraft will have the AN/APG-68V(9) radar, an advanced electronic warfare package, and will be able to carry conformal fuel tanks. Six of them will be Cs and four will be Ds. The two-seat Ds will be fully combat capable and will feature the "large spine" fitted to Israeli and Singapore F-16Ds. They will be equipped with the Joint Helmet-Mounted Cueing System, and will have Rafael Litening II targeting pods.
It is not known what weapons the Chilean F-16s will carry. The US government is reluctant to release the AMRAAM to regions where a similar level of threat does not exist, but it is known that Peru's MiG-29s are equipped with the R-77. Chile has said that the delivery of the AMRAAM is an integral part of the deal and that the aircraft will not be purchased unless these missiles are made available. Perhaps Chile will adopt the Israeli-built Rafael Derby missile for its F-16s.
The Chilean F-16 deal is a commercially-funded deal and not an FMS transaction, and it is not certain how Chile is going to be able to pay for these planes, owing to economic difficulties in the country.
The first Chilean F-16 rolled off the production line on Apr 14, 2005.
These F-16 Block 50 aircraft were supplemented by 18 used F-16A/B MLU aircraft (11 AMs, 7 BMs) that were bought from the Netherlands in 2005 and delivered by mid 2006 under Peace Amstel I. These were to be delivered between August 2006 and September 2007. In late 2008, the Chilean Ministry of Defense said that it wanted to buy 18 more aircraft from the Nethelands, this under Peace Amstel II. Deliveries were expected to start in 2010 and be completed by mid 2011.
The Chilean F-16s serve with the 1st Air Brigade, 3rd Aviation Group at Los Condores Air Base, and with the 5th Air Brigate, 7th and 8th Aviation Groups at Cerro Moreno Air Base.
Serials of Chilean AF F-16s:
02-6030/6035 Lockheed Martin F-16C Block 50 Fighting Falcon MSN VL-1/VL-6. To Chile AF as FAC serial 851/856 02-6036/6039 Lockheed Martin F-16D Block 50 Fighting Falcon MSN VM-1/VM-4. To Chile AF as FAC serial 857/860