Global fighter aircraft market heats up (excellent article)

REUTERS, 6/12/2009
http://thepeninsulaqatar.com/Display_news.asp?
file=Business_News2009061271355.xml&month=June2009&section=Business_News&subsection=mark
et+news
Overall Market:
Overall, 2,909 fighters worth $163.7bn are likely to be produced between 2008 and 2017,
according to Teal Group, the aerospace consultancy.

A total of 2,355 fighters worth $122.4bn were built between 1998 and 2007, Teal said in a
February 2009 market overview, representing a 34 percent value growth.

Lockheed Martin Corp:

Game-changing F-35 Joint Strike Fighter aircraft in early production stages, rival manufacturers
are racing against time.

F-35 Joint Strike Fighter is a projected trillion-dollar enterprise designed to dominate the
lucrative global fighter market for decades while plugging its buyers into US-built defense
architecture and cementing US-led alliances.

The radar-evading F-35 was intended for export from the get-go. It will be the first radar-evading,
stealth US warplane to be exported.

The United States alone plans to spend nearly $300bn for a total of 2,443 F-35s in three models to
be delivered over 28 years.

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.

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 Israels 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

US Defense Secretary Robert Gates recommended buying 30 F-35s in fiscal 2010, up from the 14
funded this year, boosting funding from $6.9bn to $11.2bn.

U.S. Navy is seeking nine fewer F/A 18s than had been projected last year and the department is
planning to cap purchases of Lockheeds top-of-the-line F-22 at 187 planes.

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.

Boeing:
Chicago-based Boeing, the Pentagons 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 F35, production ramps up and the price goes down.

Not since the days of McDonnells F-4 Phantom fighter in the 1960s and 1970s has Boeing been
entered into so many competitions worldwide, he said.

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.

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.

Boeing has offered the US Navy a multiyear Super Hornet deal with a unit price of about $54m,
including advanced Raytheon Co actively electronically scanned array (AESA) radar systems

Foreign Markets/Competitors:
F-35 competitors include the Saab AB Gripen, the Dassault Aviation SA Rafale, Russias MiG-35
and Sukhoi Su-3

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 $10.4bn, the biggest such market in decades.

In India, Boeing is pitting its Super Hornet against Lockheeds F-16, Dassaults Rafale, Saabs
Gripen, Russias MiG-35 and the Eurofighter Typhoon.

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.

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.

Fewer, but fitter: fighter aircraft programmes

Jane's Defense Weekly, 06-Apr-2009
By: Craig Caffrey
Changing markets
Despite European, Russian and US dominance in the current global fighter market in terms of
maket share, a shift away from these traditional centers of fighter technology, although minimal
over the next 15 years, does appear to be taking place

At present there are eight fighter production lines open in Europe and the United States; by 2020
that number is set to drop to one.

For the next 10 to 15 years fighter fleets in many of the world's largest air forces look set to
continue to shrink, while the aircraft themselves will be expected to perform an ever increasing
array of tasks.

Europe:
As European manufacturers begin to focus on the development of unmanned combat aerial
vehicles (UCAVs) such as BAE Systems' Taranis and the pan-European Neuron designed purely
around the strike mission, the effects of the F-35's monopoly on Europe remain unclear.

For the first time since fighter production began almost a century ago, Europe is set to be without
an active jet fighter production line by 2020.

China:
China is likely to strengthen its position in the market over the coming decade with the FC-1/JF17 and the J-10, particularly in countries that have no strong affiliation with either Moscow or
Washington or have limited funds.
India:
Elsewhere, joint production of the PAKFA, experience gained from the Tejas programme and the
proposed development of the Medium Combat Aircraft may see India enter the export market.
Fighters programs
Eurofighter Typhoon and Lockheed Martin F-22 Raptor, both designed purely for air superiority,
are undergoing a series of upgrades to ensure they retain their relevance in modern conflict
scenarios.

If the air forces of Belgium, France, Germany, Italy, the Netherlands, Norway, Spain Sweden and
the UK are taken as an example, current plans call for a decrease in combat aircraft levels of
between 7.4 and 34.6 per cent in all but the UK, and possibly in Spain, over the next 15 years.

It should also be noted that present-day combat aircraft inventories for each of these air forces
(other than Norway) are in turn between 9.7 and 32.5 per cent smaller than at the end of 2003.

Three key European fighters are primarily responsible for providing multirole fighter aircraft
capabilities are: Dassault's Rafale, Eurofighter's Typhoon and Saab's JAS 39 Gripen.

Rafale:
A total of 39 have so far been handed over to the French Air Force, with the navy receiving an
additional 25 marinised Rafales. In total, France has so far booked 120 Rafales.

Rafale currently accounts for 17 per cent of Dassault's order book, while the production of spares
for foreign customers of the company's Mirage 2000 series of fighters represents another four per
cent.

Dassault revealed on 19 March that sales had slipped to EUR3.73 billion (USD5 billion) in 2008:
down from EUR4 billion the previous year. Net earnings also dipped from EUR382 million to
EUR373 million.

French President Nicolas Sarkozy has been energetic in his attempts to market the type during a
recent tour of the Middle East. Libya and the United Arab Emirates.

Rafale had a narrow miss in Morocco where the Lockheed Martin F-16C/D was selected at the
last minute in June 2008.

The Rafale also remains involved in several key fighter procurement contests around the world.
Alongside contesting high-profile competitions in Brazil and India.
o The Indian Ministry of Defense deselected Rafale aircraft from the contest to meet the
Indian Air Force's (USD10 billion medium multirole combat aircraft requirement.

Additional source:
Dassault looks to Rafale export to save jobs: Jane's Defence Industry, 20-Mar-2009, J A C Lewis
Dassault's Rafale out of India's MRCA race: Jane's Defence Industry, 17-Apr-2009, Jon Grevatt

Gripen C/D:
Production of the Saab JAS 39 Gripen C/D continues with aircraft for South Africa and Thailand
following the completion of deliveries of new-build aircraft to the Swedish Air Force in
December 2008.

Alongside the 26 South African and six Thai aircraft, Saab is also rebuilding 31 Swedish Gripen
A/B aircraft to the C/D standard. However, despite Thailand clearing funding for the acquisition
of the second batch of six Gripens in February 2009, the line is expected to come to an end in
2012 unless further orders can be secured.

There are currently three key short-term prospects for keeping the Gripen line open in Brazil (36120 aircraft), India (126) and Switzerland (22-30).

Other opportunities in Denmark and the Netherlands exist, although both countries are widely
expected to follow Norway and maintain their commitment to the Lockheed Martin F-35 Joint
Strike Fighter programme.

The contests in Croatia (12) and Romania (24-48) are now subject to significant delay due to the
impact of the global financial crisis in both countries.

Lockheed Martin
December 2007 Lockheed Martin was awarded a USD498 million contract to supply 18 F16C/Ds to
Pakistan and in June 2008, secured an order for 24 F-16C/Ds for Morocco.
Deliveries of the final three F-16s from a 48-aircraft order for Poland took place in December
2008,
Greece began taking delivery of an additional 30 F-16C/Ds in March 2009.
Lockheeds F-35 Program Killer May Double Sales
Edmond Lococo and Gopal Ratnam
http://www.bloomberg.com/apps/news?pid=20601109&sid=auO7yWGep0lg
Market:
Lockheed has held 31 percent of the global fighter jet market over two decades with the F-16
Fighting Falcon, exceeding Boeings 24 percent share, according to Teal.

Lockheed has shipped more than 4,400 F-16s over 35 years, including 2,200 to international
customers.

Lockheed--F-35 fighter jet

The U.S. and eight partner nations already plan to buy more than 3,000 of the warplanes, and
with potential exports to countries including Israel, South Korea, Japan, Singapore, Finland and
Spain the total could easily reach 6,000.

The F-35 will control half the $17 billion warplane market by 2015, aviation consultants Teal
Group estimate, bringing a level of dominance unmatched even by the companys F-16 and
threatening to eliminate other primary manufacturers from the industry.

The U.S. and the eight partner nations plan to buy 3,173 F- 35s.

At an estimated cost of about $298.9 billion for research, development and the purchase of more
than 2,400 aircraft for the U.S., the plane is the Pentagons largest weapons program.

The F-35, with common parts for Air Force, Navy and Marine Corps missions ranging from air
combat and tactical bombing to close air support, is designed to replace legacy aircraft including
the F-16 and A-10

The biggest threat to the F-35s global dominance is development risk. Lockheed must keep the
jet on schedule and costs under control.

Competitors

Boeing is promoting the F/A-18 and an updated version of its F-15 called Silent Eagle to
international customers in Paris.

Saabs Gripen would be an ideal plane to compete for orders with F-35, yet lacks a home
market large enough to give it economies of scale because Swedens Air Force is only about 100
jets.

Norway dealt Saab a blow in November with a contract for 48 F-35s in a contest analysts
predicted the Gripen would win.

The Netherlands selected the U.S. plane as the best candidate to replace 85 older aircraft a month
later, and Denmark may also opt for Lockheed later this year.
Boeing makes play for international fighter sales
Jane's Defense Weekly, 12-Jun-2009
Caitlin Harrington

Boeing is making an aggressive pitch for international fighter sales in 2009 and 2010

Boeing revealed its sales plans as others warn of a consolidation of the fighter jet industry.
One senior executive at Saab recently predicted that within the next three to five years, the
world's group of seven established fighter jet exporters could shrink to five and that MiG as
well as Saab, Dassault or Boeing are likely to fold.

The company hopes to sell both the F/A-18E/F Super Hornet and F-15SE Silent Eagle

Boeing says it has reason to believe the US Navy (USN) will choose to buy more Super Hornets
beyond the nine F/A-18 aircraft (and 22 EA-18G Growlers, the electronic attack variant of the
F/A-18
Paris Air Show: Russia has high hopes for 2009 exports
Jane's Defense Weekly, 16-Jun-2009
Gerrard Cowan

Russia will generate arms exports of more than USD8 billion in 2009 despite the global economic
crisis and growing competition in the global fighter aircraft market.

MiG and Sukhoi accounted for 20 per cent of the world fighter jet market and 40 per cent of
Russian military exports, and that they had a backlog of USD8 billion. MiG has struggled over
the past decade, with Sukhoi dominating the domestic market.

Oleg Demchenko, the President of Sukhoi subordinate Irkut, said that "in combat aviation we are
competing quite well and so far no virtual fight between an F-15 and an Su-30 has been
conclusive". He additionally claimed that "neither the Eurofighter nor the Rafale can compete
[with the Su-30]".

Irkut can produce 60 Yak-130 advanced jet trainer/light attack aircraft units per year; Russia plans
to purchase up to 200, with an initial procurement batch of 60 due to be delivered by 2015, while
Algeria is its sole export customer, with an order placed for 16.

Lockheed fighter jet killing the competition

Posted Jun 17th 2009 9:00AM
Tom Johansmeyer
http://www.bloggingstocks.com/2009/06/17/lockheed-fighter-jet-killing-the-competition/
Boeing versus Lockheed:
By 2020, according to a report by Bloomberg, there could be only one fighter plane in the
western world. According to an analyst from the Teal Group, which is an aviation consultancy,
this is by design, following the F-16's plan.

In addition to the possibility of expedited sales in the United States, talks are beginning with
several nations not included in the original deal -- including Finland, Spain, South Korea and
Japan.

Boeing is banking on its F/A-18 Super Hornet for the future, and Saab is leaning on the Gripen,
which unfortunately has only a limited domestic market.

Market Share:
If all goes as planned, Lockheed's 31% share of the global fighter jet market, which has persisted
for more than 20 years, would spike to 50%.

Currently, Boeing owns 24% of this $17 billion market, but it's clearly a stake that's in jeopardy.
Can Russia take on the US in global market?
Jane's Defence Weekly, 03-Jun-2009
Guy Anderson and Craig Caffrey
Russian arms export body Rosoboronexport is looking to offset its declining presence in
traditional markets with a goal of "penetrating the markets of other countries", where the key
competitor will be the United States.

South America
Brazil - the 17th largest defence market in the world with a 2008 budget of USD24.94 billion presents a prime target for both the US and Russia.

The F-X2 programme to procure a future fighter jet to maintain capability once Brazil's Mirage
III BR, and F-5 Tiger, retire from service had led Russia to field the Su-27 against the Lockheed
Martin F-16 and the Boeing F/A-18 Hornet.

Elsewhere, Peru is seeking a replacement for its Mirage 2000 fleet, which points towards a
competition between the Su-27 and F-16,

Colombia could also look to the F-16 and Su-30 as part of a strategy to augment its air defence
capabilities.

Argentina and Mexico also provide fighter aircraft opportunities, Argentina additionally requires
heavy-lift helicopters (such as the Mi-26 and CH-47 once again).

Middle East
Russia has made overtures towards Saudi Arabia. Saudi's pending requirement for attack
helicopters (based on current operational requirements) suggests a competition between the AH64 Apache and Mi-24, while the kingdom's transport aircraft requirement points to a competition
between the US UH-60 and Mi-17.

Requirements also exist in Egypt and Algeria. Opportunities in Asia include India (heavy
transport helicopters and combat aircraft) and Malaysia (attack helicopters).
Used USAF F-16s provide cheap multirole option
Jane's Defense Weekly, 21-Jul-2009
By: Jim Dorschner

The Combat Air Forces restructuring plan calls for the retirement of 134 mostly Block 25 F-16s
as part of a comprehensive plan to save some USD3.5 billion over the next five fiscal years

Potential recipients include Bulgaria, Colombia, Croatia, Indonesia, Iraq, Mexico, Pakistan, the
Philippines, Romania and Tunisia.

The US offered Bulgaria eight refurbished Block 25 F-16C/Ds in December 2008 to meet a longdeferred fighter replacement requirement.

In the case of Romania, DOD notified Congress in May 2008 of a proposed sale of 24 new F16C/D Block 50/52 and 24 refurbished and upgraded F-16C/D Block 25 aircraft in a package
worth some USD4.5 billion.

Elsewhere, Iraq is exploring the purchase of a number of new F-16s, but in light of falling oil
revenues, could find upgraded older aircraft attractive and more rapidly obtainable.

Croatia was widely expected to select the Gripen this year in a competition valued at
approximately USD844 million for 12 new fighters to replace ageing MiG-21s. Croatia cancelled
in March in the face of national economic pressures.

In February 2008, US Defense Secretary Robert Gates offered six new-build F-16 Block 50/52
Fighting Falcons for delivery to Indonesia from 2010 as part of a package expected to include the
overhaul and upgrade of the country's existing F-16A/Bs.

Indonesia opted for the phased introduction of a small force of Su-27 and Su-30 fighters from
Russia at a cost of around USD550 million.