Wednesday, June 24, 2009

DTN News: Defence Groups Fight For military Contracts

DTN News: Defence Groups Fight For military Contracts *Sources: DTN News / The Times By David Robertson (NSI News Source Info) LONDON - June 24, 2009: Defence companies are preparing for the biggest surge in orders for fighter jets since the Cold War, with nearly $100 billion (£61 billion) of business thought to be up for grabs — but the stakes are higher than ever for those manufacturers chasing the contracts. Eurofighter Typhoon ~ The authorisation for Tranche 3 production and capabilities will have a tremendous effect on the export potential of Eurofighter Typhoon. Having already secured two export contracts with Austria in 2003 and the Kingdom of Saudi Arabia in 2007, the Eurofighter partner companies are actively pursuing campaigns in Switzerland, India, Japan, Romania, Greece, Turkey and exploring possible opportunities in Bulgaria and Croatia. With the production of Eurofighter Typhoon now being confirmed until the later part of the next decade and the agreed new capabilities, Eurofighter Typhoon confirms itself as the most advanced real multirole fighter available on the market. The winners of big orders will gain entry to new markets and guarantee multibillion-dollar revenue streams for decades; the losers may be forced out of the fighter market altogether because the cost of developing new aircraft has risen so high that they might not be able to challenge in future. BAE Systems, Europe’s largest defence company, is one of the best-placed. It is part of the consortium building the Eurofighter Typhoon, a leading contender in many of the competitions. Defence sources have said that the future of Rafale, France’s independent fighter programme, is under threat if it cannot win at least one big order. Likewise, Russia’s MiG could cease to be a viable export product for all but second-tier states. Gripen, of Sweden, needs big wins to stay in production. Even Boeing, the largest aerospace company in the world, is facing an uncertain future in the market as its F18 Super Hornet and F15 may be eclipsed by the Typhoon and Lockheed Martin’s F35. Defence chiefs have told The Times that they have never known so much international competition for fighters, with a dozen countries expected to announce plans to buy new aircraft soon. The biggest prize is India’s medium multirole combat aircraft project, worth more than $12 billion for about 126 aircraft. Gripen, Typhoon, the F18 Super Hornet, the Lockheed Martin F16 and the MiG 35 are on offer, with a decision likely next year. Brazil wants 36 new fighters and a preferred bidder is expected to be announced this year. In the running are the F18, Rafale and Gripen. A senior defence source said at the Paris Air Show: “This is the last roll of the dice for some of these aircraft. If Rafale and Gripen do not win at least one big order, it is hard to see how they can survive. MiG is finished in the leading countries if it does not get India.” There are also strategic concerns for a country such as France because, if it cannot afford to keep Rafale going, it will have to join an international project, such as the Joint Strike Fighter. BAE is leading Typhoon campaigns in the Middle East and Japan and is also involved with the India bid. The Japanese order could be the most valuable, at up to $25 billion, depending on the model selected. The Japanese are thought to want Lockheed Martin F22s at $250 million each, but the United States does not permit them to be exported. However, the Pentagon has said that it will not buy any more F22s and it may be willing to loosen export rules so that Lockheed can keep the production line open. If the F22 is unavailable, the Typhoon may be next in line. It would be a coup for Europe, as previously Japan has bought its military equipment from the United States. It would open a market for BAE and extend the life of the production line at Warton, Lancashire. BAE switch Walt Havenstein, chief executive of BAE Systems’ US business, has resigned a year after missing the top job. Mr Havenstein, who has worked for BAE since 2000, is to become chief executive of SAIC, an American defence group. General Anthony Zinni, a member of BAE Systems Inc’s board, becomes chairman of the US business and will stand in for Mr Havenstein until a successor is found.

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