DTN News: Global Fighter Aircraft Market Heats Up
*Source: Int'l Defense Media
(NSI News Source Info) WASHINGTON– June 12, 2009: With the game-changing F-35 Joint Strike Fighter aircraft in early production stages, rival manufacturers are racing against time.
The F-35 may be regarded almost as much as an industrial and coalition-building policy as a warplane made by Lockheed Martin Corp the Pentagon's No. 1 supplier by sales and the world's largest aerospace company.
The F-35 Joint Strike Fighter is a multi-Service/international cooperation warplane. The cornerstone of the program is affordability based on a next-generation, multi-role strike fighter aircraft that will have a 70 to 90 percent commonality factor for all the variants, significantly reducing manufacturing, support and training costs. First delivery of operational aircraft is anticipated in fiscal 2008.
It is a projected trillion-dollar enterprise designed to dominate the lucrative global fighter market for decades while plugging its buyers into U.S.-built defense architecture and cementing U.S.-led alliances.
Unlike Lockheed's premier F-22 fighter, which flies faster, and higher and can range further, the radar-evading F-35 was intended for export from the get-go. It will be the first radar-evading, "stealth" U.S. warplane to be exported. And it is the costliest planned acquisition in Defense Department history.
The United States alone plans to spend nearly $300 billion for a total of 2,443 F-35s in three models to be delivered over 28 years. All are derived from a common design and would use the same sustainment infrastructure worldwide.
"The plan has firmed up" with no defections among foreign development partners, says Richard Aboulafia, a fighter-market expert at Teal Group, an aerospace consultancy in Fairfax, Virginia.
The F-35 is co-financed by the United States, Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway. All the U.S. partners appear to be largely sticking to plans to buy a combined 750 F-35s, at least for now.
F-35 competitors include the Saab AB Gripen, the Dassault Aviation SA Rafale, Russia's MiG-35 and Sukhoi Su-35, and the Eurofighter Typhoon made by a consortium of British, German, Italian and Spanish companies.
Dassault has been pitching its Rafale to the United Arab Emirates in what would be the first overseas sale of the aircraft.
Brazil has short-listed the Rafale, Gripen and Boeing Co F-18E/F Super Hornet as finalists in a competition that could involve the purchase of more than 100 aircraft.
Next month, India is due to start year-long flight evaluations for the purchase of 126 multi-role fighters worth up to $10.4 billion, the biggest such market in decades. Indonesia and Malaysia are weighing Russian-made Sukhois. Switzerland is looking at the Eurofighter, Gripen and Rafale. Greece is evaluating the Eurofighter and the Super Hornet.
In India, Boeing is pitting its Super Hornet against Lockheed's F-16, Dassault's Rafale, Saab's Gripen, Russia's MiG-35 and the Eurofighter Typhoon.
Of the Swiss and Indian fighter competitions, Stefan Zoller, chief executive of EADS' defense and security division, told Reuters: "Both campaigns are hot; both campaigns are running exactly on schedule".
Chicago-based Boeing, the Pentagon's No. 2 supplier by sales and the top U.S. exporter, says it sees big opportunities for its F-15 and F/A-18 fighters before Lockheed works out kinks in the F-35, production ramps up and the price goes down.
"It's a great time to be in the fighter business," Bob Gower, the head of Boeing's F/A-18 program, told a briefing ahead of the Paris Air show next week.
Not since the days of McDonnell's F-4 Phantom fighter in the 1960s and 1970s has Boeing been entered into so many competitions worldwide, he said.
At the same time, Boeing is shopping for partners to co-fund development of a proposed new F-15 "Silent Eagle", a version aimed at Asian and Middle East markets that would feature special coatings to reduce its radar signature and other survivability improvements to go up against the F-35.
Chris Chadwick, president of Boeing's military aircraft division, told reporters last week: "With F-35 continuing to struggle to a certain extent, we think that we offer ... the right amount of capability at the right cost at the right time for a lot of the international customers."
He described a four-to six-year window of opportunity including potential sales to India, Denmark and Brazil, which have competitions under way that also involve rival Russian and European fighters.
Japan, Saudi Arabia, South Korea, Qatar and Kuwait are among other countries that have shown interest in modernizing their fighter fleets in the relatively short term.
Australia has ordered 24 two-seat F/A-18F Super Hornets, with deliveries to start on July 8 and to be completed by 2012, the only Super Hornet export sale so far.
"The worst time you can buy a fighter is during the initial stages because the capability comes along later and the learning comes along later," Boeing's Chadwick said in a swipe at early purchases of Lockheed's F-35.
Boeing has offered the U.S. Navy a multiyear Super Hornet deal with a unit price of about $54 million, including advanced Raytheon Co actively electronically scanned array (AESA) radar systems and "the whole nine yards," Chadwick said.
Chris Geisel, a Lockheed spokesman, says the F-35A conventional take-off and landing model is projected to cost in the upper $60 million range per copy in adjusted 2014 dollars, when full production is due to kick in.
Three single-engine F-35 versions are under development by Lockheed: the conventional version for the Air Force, a short-takeoff-and-vertical landing model for the Marine Corps and a third for the Navy's aircraft carriers.
Lockheed's chief F-35 subcontractors are Northrop Grumman Corp and BAE Systems Plc Two rival, interchangeable F-35 engines are under development. One is built by United Technologies Corp's Pratt & Whitney unit; the other by a team of General Electric Co and Rolls-Royce Group Plc
Projected early F-35 buyers include Israel, which plans to acquire 25 in fiscal 2012 for delivery starting in 2014 with an option for 50 more. A sticking point has been Israel's efforts to add its own electronic warfare know-how.
Singapore, the other non-consortium member linked to the F-35 program through a special status, may start buying as many as 100 a year or two after Israel, Jon Schreiber, the Pentagon official who heads the program's international aspects, told Reuters in a March 17 interview.
U.S. Defense Secretary Robert Gates recommended buying 30 F-35s in fiscal 2010, up from the 14 funded this year, boosting funding from $6.9 billion to $11.2 billion. At the same time, the Navy is seeking nine fewer F/A 18s than had been projected last year and the department is planning to cap purchases of Lockheed's top-of-the-line F-22 at 187 planes.
"By accelerating the (F-35's) procurement ramp, we can lower procurement costs while also making the platform more cost competitive for our coalition partners," Air Force Secretary Michael Donley and General Norton Schwartz, the service's top officer, said in a June 3 statement to Congress.
Lockheed says all 24 countries that fly its multi-role F-16 fighter are potential buyers of the F-35, which is designed to replace at least 13 types of aircraft, including the F-16.
Overall, 2,909 fighters worth $163.7 billion are likely to be produced between 2008 and 2017, according to Teal Group, the aerospace consultancy. A total of 2,355 fighters worth $122.4 billion were built between 1998 and 2007, Teal said in a February 2009 market overview, representing a 34 per cent value growth.
"Boeing and the European primes have some strong business opportunities over the next five to 10 years," Aboulafia said in an email exchange. "But beyond these, the fighter market will belong to the F-35."
"It's quite likely that after 2020 the market will comprise the F-35 family and some Russian planes," he added.
Northrop was notified on Wednesday of the termination, which was "for the convenience of the government," not because of any company performance shortfall, according to a copy of the notice obtained by Reuters.
Northrop had carried out about $1.2 billion of work under its contract for the kinetic energy interceptor, or KEI, which was designed to shoot down missiles soon after their launch.
There is an established process for the resolution of termination costs when the government cancels a contract for its convenience.
"This process is currently under way," said Chris Taylor, a Missile Defense Agency spokesman.
The termination was part of a strategy to "refocus the Ballistic Missile Defense System on a course of overall mission readiness," the agency said in a statement.
Northrop Grumman had no immediate comment.
Defense Secretary Robert Gates had announced plans to cancel the KEI as part of a restructuring of U.S. missile-defense efforts under the proposed fiscal 2010 budget.
Gates and the Missile Defense Agency said the system had limited capability, would have been difficult to fire from ships because of its large size, cost too much and would have to have been launched from close to the target.
After a stop work order was issued last month, Northrop had called on the Pentagon to go ahead with a "booster flight test" to help it reap knowledge that could be put to use on other systems.
Northrop argued it had completed 90 percent of everything needed to do the test when the Pentagon stopped work on May 11.
In its June 10 notification, the government directed Northrop, in an exception to the termination, to present an overview of its progress on the program to Army Lt. Gen. Patrick O'Reilly, who heads the Missile Defense Agency.
Specifically, Northrop was told to report by June 30 on systems engineering, fire control and communications architecture and algorithm development.
"The purpose of this presentation is to support an MDA assessment and determination of how MDA can maximize leveraging of the work conducted to date in these areas for application to future (ballistic missile defense system) work," it said.
The Pentagon also has announced plans to kill Lockheed Martin Corp's Multiple Kill Vehicle, or MKV, which was intended to destroy not only an enemy warhead but any decoys or other countermeasures deployed to spoof U.S. defenses.
"It was designed to deal with a more complex threat that would have come potentially from either China or Russia," Gates told the House of Representatives Armed Services Committee on May 13.
U.S. missile defenses, as developed to date and deployed since 2004, are to protect against what the United States calls rogue states such as North Korea and Iran.
The military sent jet fighters to bomb suspected militant strongholds in the Bajur tribal region _ extending its military operations against the Taliban in the northwest.
The A-10 Thunderbolt II is an American single-seat, twin-engine, straight-wing jet aircraft developed by Fairchild-Republic for the United States Air Force to provide close air support (CAS) of ground forces by attacking tanks, armored vehicles and other ground targets with a limited air interdiction capability. It is the first U.S. Air Force aircraft designed exclusively for close air support.
The A-10's official name comes from the Republic P-47 Thunderbolt of World War II, a fighter that was particularly effective at close air support. The A-10 is more commonly known by its nickname "Warthog" or simply "Hog". As a secondary mission, it provides airborne forward air control, guiding other aircraft against ground targets. A-10s used primarily in this role are designated OA-10.*
Tanker aircraft competition could reopen in July: GatesThe Pentagon could reopen a competition between Boeing and an EADS/Northrop Grumman team to replace the US military's aging fleet of air refueling aircraft as early as next month, Defense Secretary Robert Gates said Tuesday. Gates told lawmakers he expected to make a final decision within a week or 10 days on "the acquisition authority and the structure we're going to put into place to ensure that it is a fair, open and transparent process." The Pentagon's acquisition team hopes to put out a request for proposal "this summer, perhaps next month," he said. "Our hope is to probably try and get the RFP (request for proposal) out mid-summer." The Pentagon awarded the 35-billion-dollar contract for 179 aircraft to the EADS/Northrop Grumman team in February 2008, but Boeing successfully challenged the decision with the Government Accountability Office (GAO), which recommended it be recompeted. "Part of the process I'm going through right now is to try and structure this in a way that puts the best people on this program and that provides a supervisory role," Gates said, adding he would ask his deputy to "take a very close interest in this process." Gates had initially said he expected competition for the politically sensitive contract to be reopened in the spring of 2009, and then in the summer.
Sarkozy and German Chancellor Angela Merkel discussed the fate of the plane being built by Airbus, a subsidiary of European aerospace giant EADS, during a meeting at the Elysee presidential palace.
"We talked about the A400M and decided that it would be good to give ourselves a small delay of six months to continue discussions and to find the best possible solution," said Sarkozy at a joint news conference.
The A400M was initially scheduled to start being delivered at the end of 2009 but the programme has suffered from a delay of at least three years and clients have threatened to cancel their orders.
The military transport plane was unveiled last year but it has been hit by delays in building its massive turbo-prop engines, putting the 20-billion-euro (28-billion-dollar) project at risk.
Spain, Belgium, Britain, France, Germany, Luxembourg and Turkey are participating in the A400M programme.
"We are in full agreement... We will give ourselves a few more months and then we will see," said Merkel, who added that France and Germany "need a transport plane in any case."
French Defence Minister Herve Morin said this month that there would likely be a meeting of ministers from the seven participating countries and EADS to renegotiate the delivery contracts.
