armada international 3-2003 - complete guide to world aircraft market

33armada INTERNATIONAL 3/2003

Complete Guide

Military Aircraft Market:

As the commercial transport market remains depressed, aircraft manufactur-ers are looking urgently for growth in the military sector to maintain salesvolumes and profit margins. However, current military operations will inthe short-term boost spending on guided missiles and bombs, rather than onaircraft replacements.

Who, Why, When?

Roy Braybrook, inputs by Eric H. Biass

I n the longer term the outlook for newmilitary aircraft sales is much brighter,as 21st Century needs trigger booming

sales in long-range transports, tankers, andboth combat and multi-role helicopters,and as US-led technological developmentssuch as stealth fighters and sensor plat-forms result in new types of operationalrequirements being generated by medium-and even small-size air forces.

Why do air forces buy new aircraft?Sometimes a purchase is made primarilyto eliminate a shortfall in the officers’pension fund, anything up to 25 per centbeing creamed off the top of the contractvalue. However, for the purposes of thisdiscussion, it is assumed that most of thespending associated with military aircraftprocurement is performed by the majorair forces, which use their funds toreplace obsolescent assets and to exploitthe operational advances made possibleby the latest technologies, allowing themto respond to developing needs. Smaller

air forces should rationally watch whattheir larger counterparts are doing, andfollow suit to the best of their ability, ifnecessary forming regional groupings insuch fields as aircrew training, transportsand tankers.

Developing NeedsEach of what might be termed the ‘post-WW conflicts’ has significantly changedthe face of warfare. Korea introducedcombat between jet fighters for control ofthe air, the small-scale employment ofair-to-surface guided weapons and theuse of helicopters to evacuate casualtiesfrom the battlefront. France’s coin(counter-insurgency) operations in Alge-ria saw the first use of turbine-enginedhelicopters armed with cannon and wire-guided, joystick-controlled missiles.

Vietnam brought coin operations intothe jungle, the use of air-to-air guided mis-siles and laser-guided bombs, SA-2s andman-portable SA-7s, large-scale in-flightrefuelling for fighters and bombers, theemployment of helicopters to deploy and

extract army combat units, the develop-ment of tandem-seat dedicated attack heli-copters, gunship conversions of fixed-wingtransports and the use of long-range sur-veillance UAVs and AEW&C aircraft.

The Falklands conflict of 1982 demon-strated the effectiveness of air-launched

Lockheed Martin F/A-22 Raptor

R oy Braybrook, a regular contrib-utor to Armada International,was formerly a Technical Market-

ing Consultant at British Aerospace,Kingston, working on both the Hawkand Harrier programmes.

About the Author

anti-ship guided weapons, and witnessedthe first operations by Stovl fighters from aircraft carriers and their usage of ashort airstrip. In that same year, theIsraeli invasion of Lebanon saw sensor-equipped tactical drones playing a signif-icant role for the first time. Soviet coinoperations in the mountains ofAfghanistan in the 1980s showed theneed for helicopters to be armed withlarge-calibre guns to out-range groundfire (as the US Army had discovered inGrenada in 1983), and for dedicated closesupport aircraft with extensive armourplating and unprecedented numbers ofdecoy flares.

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34 armada INTERNATIONAL 3/2003

The 1991 Gulf War may be recalled asa conflict that, being the first ‘out-of-area’deployment for many Nato services,placed enormous logistic demands on theair forces of the Coalition, demands thatin some respects could then be met onlyby the US Air Force ‘s Lockheed MartinC-5 or by chartered Antonov An-124s.However, the capacity of airlift (in tonne-kilometres per day) is small in compari-son with sealift. Luckily, Iraq did not seekto exploit its conquest of Kuwait by press-ing on to occupy Saudi oil fields; hencethe Coalition had over six months to pre-pare for the ground war.

In its aftermath, America stockpiledmateriel at depots in the region (and onislands and vessels in the Indian Ocean),rather than ordering new-build C-5s. Theexperience nonetheless obliged the airforces of principal European powers toreview their own airlift capacities, theresults of which will appear over this andthe next decade.

In terms of transport aircraft deriva-tives, the Gulf War also provided a force-ful argument for the Boeing 707-derivedE-3 Awacs, KC-135/KE-3A tanker andthe Northrop Grumman E-8 Jstars. Allplayed vital roles, paving the way for salesof analogous versions of Boeing’s 767. Itwas also a technologically advanced war,with the Lockheed Martin F-117Astealth strike aircraft used operationallyfor the first time and GPS satellite navi-gation making its début.

Above all, the Gulf War demonstratedthat (in certain circumstances) the over-whelming use of air power could allowground forces to achieve victory in a veryshort time (100 hours in that instance)and with few casualties. It also showedthe value of precision weapon delivery inminimising collateral damage, and theneed for a foolproof means to identifyCoalition forces from the air, in order toavoid friendly fire accidents.

Although it lasted only 78 days, andwas geographically and meteorologicallymuch closer to the all-out war in centralEurope for which Nato had trained, the

Kosovo conflict of 1999 (OperationAllied Force) provided some importantnew lessons. For example, the effective-ness of Yugoslavia’s Soviet-style air

being cleared to use non-guided bombs(BL755 cluster weapons) through cloud,but only against those targets where theexpected collateral damage was judgednot to be excessive. Most of the 14 non-US Nato countries that participatedrelied heavily on the US Air Force forSead (suppression of enemy air defences)and Csar (combat search and rescue).

Allied Force involved the first use ofGPS-aided munitions, from the 900 kgBoeing GBU-31 Jdam (joint Direct attackMunition), of which up to 16 individually-targeted examples could be delivered by aNorthrop Grumman B-2A flying directfrom the US, to the Boeing AGM-86CCalcm (Conventional Air-LaunchedCruise Missile) launched in stand-offattacks by B-52s operating from Britain.Other examples included the 2270 kg classGBU-37 hard target penetrator, againdelivered by the B-2A, and the RaytheonAGM-154 Jsow (Joint Stand-Off Weapon)glide dispenser launched by US Navy andUS Marine Corps F/A-18s. The Kosovooperation also marked the first opera-tional use of the General Atomics Preda-tor medium-altitude long endurancedrone and of the Boeing C-17. The latterprovided a valuable advance in logistics, inbeing able to deliver cargo direct to rela-tively small airfields. It also provided a fastturn-round, thus freeing up apron parkingspace. The successful debut of the C-17was not lost on America’s Nato allies.Another of the lessons of Allied Force wasthat the 900-plus Nato aircraft placedsevere demands on airfields in the region.This resulted in tankers being based fur-ther back and given increased crew/air-craft ratios.

Following the terrorist attacks in theUS on 11 September 2001, OperationEnduring Freedom began with strikes ontargets in Afghanistan on 7 October, in acampaign that was to be characterised byeven greater basing problems than withKosovo, and even greater deployment dis-tances (and longer strike radii from air-craft carriers) than in Desert Storm. Justas the Gulf War had thrown up a need forpenetration weapons to destroy deeply

The Sukhoi Su-25TK is heavily armed and armoured, representing the result of Sovietexperience in Afghanistan in the 1980s. It has provisions for a radar pod under thefuselage. (Armada/RB)

The Lockheed Martin F-35 Joint Strike Fighter will represent an attractive combinationof multi-role operational capability, reasonable cost and stealth, if, in fact, it is everreleased for export. (Lockheed Martin)

«…the Gulf Wardemonstrated that […] theoverwhelming use of air

power could allow groundforces to achieve victory ina very short time […] and

with few casualties.»

defences restricted Nato air operations toover 15,000 ft for the entire duration ofhostilities.This, combined with mountain-ous terrain and adverse weather on allbut 21 days, placed severe restrictions onair-to-ground operations. Britain, withonly laser-guided bombs for precisiondelivery, made its contribution largely by

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buried bunkers, Afghanistan demandedspecial weapons to attack mountain cavecomplexes. Both conflicts demonstratedthe need for aircraft capable of deliveringextremely heavy (two tonne plus) individ-ual munitions. Enduring Freedom includ-ed the first operational deployment of theNorthrop Grumman RQ-4A GlobalHawk high-altitude long endurance UAV,a potential replacement for the mannedLockheed Martin U-2S. Afghanistan mayalso have provided the first opportunityfor Boeing AV-8Bs to be operated close(65 km) to a front-line, generating the highsortie rates that Stovl proponents havealways claimed possible.

Lessons IgnoredThese various conflicts have produced newtypes of operational requirements, but airforces have not always followed thesethrough to the procurement stage.

A replay of Vietnam would arguablyhave demanded a turboprop Stol coinaircraft to provide quick reaction fromforward strips against lightly armedinsurgents in jungle, but the war actuallyled to the turbofan-powered A-10, whichwas literally designed around a massivetank-killing gun. The A-10 was supposedto have credibility in the long-awaitedarmour battle in Central Europe, butEuro-Nato air forces were less than con-vinced. In the event, the A-10 proved use-ful in the close support and FAC rolesduring the Gulf War, but its inability tostrike at second echelon forces made theconcept suitable only for a multi-type airforce such as those of the United Statesand the Russian Federation.

The latter has the Sukhoi Su-25 (Frog-foot), which was undoubtedly inspired bythe A-10, but has a much thinner wing, pro-viding higher speed and more credibility asa general-purpose ground attack aircraft.It also has record-breaking passivedefence measures (armour and flare-dis-pensers) that in Afghanistan proved theireffectiveness against the best shoulder-launched surface-to-air missiles.The Su-25is widely used in the CIS, and has beenexported to Bulgaria, the Congo, Iran,Iraq, North Korea, Peru and Slovakia.

The Gulf War demonstrated beyonddoubt the value of a stealth strike aircraft(Lockheed Martin F-117A) in the firstfew nights of a war against an enemy witha modern air defence system.Although itseems logical to suppose that Britain

admitted by Lockheed Martin to repre-sent a relatively crude first-generationapproach to stealth design, which wouldsoon be superseded (thanks to better com-puters) by a second-generation approachallowing curved surfaces. Incidentally, thefacetted stealth design of the F-117 is ofRussian origin; however, as it often hap-pened during the Soviet era, the theory ofits inventor was not deemed credible, andthe then director of the Skunk Works BenRich managed to get the documentssmuggled out of the Soviet Union. Thestealth-related maintenance workload ofthis first generation may also have been apowerful negative incentive. In the event,the second generation stealthy strikefighter, presumably to be represented bythe same company’s F-35 JSF or the pro-posed FB-22 development of its Raptor,has been a long time in coming.

One of the most important lessons ofthe Gulf War may have been that low-techballistic missiles pose a threat, not only topopulation centres (as was found inWWII) but also to major military bases.The American response to this threat wasto improve base defences by the deploy-ment of Raytheon Patriot systems. As faras can be judged from TV newscasts, noteven helicopters were dispersed off base,despite the possibility of Scuds deliveringchemical or biological warheads. Perhapswrongly, the Gulf War thus apparently didlittle to advance the cause of Stovl combataircraft and Stol transports. The US AirForce has not switched from the Ctol F-35A to the Stovl F-35B, and the idea ofa tilt-wing Advanced Theatre Transportremains a Boeing pipe-dream, althoughthe company hopes to get DoD/Darpafunding to put a tilt-wing with four turbo-props and cyclic-controlled propellers onthe YC-15 prototype fuselage.

Paradigm ShiftsThe biggest change over the last half-cen-tury in terms of operational scenarios for

The Sukhoi Su-27/30 series, represented here by an Su-30MK, has so far beenexported on a large scale to China and India. A successful sale to Brazil might openfloodgates. (Armada/RB)

Sales of the MiG-29 have so far been restricted by its limited internal fuel volume andsomewhat dated cockpit, but this extensively redesigned MiG-29SMT has a positivechance of reviving its prospects. (MiG-Rac)

«Incidentally, the facettedstealth design of the F-17

is of Russian origin…»

(at least) would have been allowed tohave the F-117, no such contract wasinked, nor did the US Air Force move toaugment its single wing of these aircraft(currently estimated as having only 52left from the 59 delivered).

The lack of reaction by Britain mayhave been due to restrictions placed onuse of the F-117, meaning that initialstrikes might as well be left to the US AirForce. Part of the explanation may be thatthe multi-faceted shape of the F-117 was

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The Alenia/Lockheed Martin C-27J Spartan may sometimes be regarded as but half aHercules, in light of its having two of the Rolls-Royce AE2100D engines of which the C-130J has four. (Alenia/LM)

«…in the early post-war era it was taken for grantedthat fighters and jet trainers

would be replaced at ten-year intervals.»

The Lockheed Martin C-130J Hercules series, exemplified by a stretched C-130J-30 forBritain’s Royal Air Force, is now assured of a substantial domestic market, with 168planned for the US Air Force alone. (Armada/RB)

the leading air forces has resulted from thecomparatively recent disappearance of thethreat of a Warsaw Pact armoured thrustacross the North German plain. Since thattime Nato has found a new role in a UN-sponsored, world-wide version of old-fash-ioned gunboat diplomacy. Demands forferry range and radius of action haveincreased accordingly, and the all-impor-tant challenge of disabling a main battletank (MBT) has been replaced by arequirement to deal with a wide variety oftargets, representing everything but tanks,and with increased emphasis on reducedcost of operation.

Although Nato may continue to pro-vide the basis for many global policingoperations, the coalitions involved willinevitably vary in composition, and it willthus be difficult to ensure interoperabili-ty and secure communications. Such con-siderations may appear to favour thewider adoption of US equipment. It iscertainly clear that - as the result of expe-rience in the Gulf War - Britain (at least)is now more willing to adopt Americanaircraft, the Boeing AH-64D, LockheedMartin F-35 and Boeing C-17 being obvi-ous examples. The days when the RAFwas obliged to wait years for Britishindustry to develop substitutes for USaircraft have clearly passed.

The principal change in the nature ofoperational requirements has occurredrelatively suddenly, in the last decade. Onthe other hand, some equally importantchanges in the military aircraft businesshave taken place gradually over the pasthalf-century. Two obvious examples areunit cost and service life.

Based on the Pentagon’s FY2004budget request, the unit procurementcost of the Lockheed Martin/BoeingF/A-22 is scheduled to fall from $ 223.4million for the 20 aircraft funded inFY2003 to $ 187.6 million for the 24 air-craft in FY2005. If the Congressionally-capped production programme figure of$ 43 billion is applied to the total run of276 F-22s for the US Air Force (reduced

from the original 648), the average pro-duction cost is $ 155.8 million. However,if the development cost of around $ 20billion is added, the average unit cost ofthe F-22 rises to $ 228.3 million, at whichorder of magnitude very few air forceswill be able to afford even one Raptorsquadron. It should be noted that the

domestic production run could increasebeyond 276, if economies can be made.For comparison, South Korea’s order for40 Boeing F-15Ks in 2002 was worth amodest $ 4.0 billion with initial sparesand the usual support, implying a unit fly-away price below $ 70 million.

On the up side, avionics reliability hasimproved substantially, and it is argued(e.g. in the case of the F-35) that, com-

bined with the benefits of a prognostichealth management system, this ends anynecessity to replace legacy aircraft on aone-for-one basis.

On the matter of service life, in theearly post-war era it was taken for grant-ed that fighters and jet trainers would bereplaced at ten-year intervals. Today’sproducts, in contrast, are expected toremain viable for 40 to 50 years.With duerespect to Northrop Grumman, in 1961,when the US Air Force began receivingthe T-38 Talon, few people in the jet train-er business expected it to set records forlongevity. Today, benefiting from majorupgrade and re-wing programmes, the T-38C is set to remain in service until 2040.At the opposite end of the size spectrum,the first US Air Force B-52H was alsodelivered in 1961 and is likewise expect-ed to serve until 2040.

Sellers’ ViewpointThe upward trend in costs and the down-ward trend in numbers of aircraft pro-cured have been evident since the early1960s. On a few noteworthy occasionsthese trends have been halted by an out-standing design that delivers excellentperformance across a broad spectrum ofroles, yet is based on a relatively small andsimple airframe/engine combination. Theclassic example is the Lockheed Martin F-16, of which well over 4000 exampleshave been built for 22 nations. Althoughdeliveries to the US Air Force began in1979, the F-16 continues to sell, the mostrecent deal being a $ 3.5 billion contractfor 48 aircraft for Poland (with over $ 6.0billion in offsets). The company expects tokeep the F-16 production line open beyond2010, and the US Air Force plans to keepthe aircraft in service until 2030.

Lockheed Martin clearly hopes torepeat its F-16 success in marketing theF-35, which is scheduled to reach InitialOperational Capability (IOC) with theUS Air Force in 2011. In 2002 values, theCtol F-35A is expected to cost $ 37 mil-lion, the Stovl F-35B $ 46 million, and theUSN (carrier-operable) F-35C version $ 48 million. Around 2500 units areplanned for the US services.

The F-35 programme illustrates manyfacets of cost-reduction. One of the funda-

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mentals is to maximise the potential mar-ket through a design that can replace abroad spectrum of aircraft, and that (forthis and other reasons) will be attractiveto the largest possible number of coun-tries. The situation that should be avoidedin the future is the present head-to-headcompetition between the Dassault Rafaleand the Eurofighter Typhoon, whichreduces the size of the potential market,increases unit production cost and (from apan-European viewpoint) represents awaste of development funds.

The F-35 development programme isintroducing an innovative way of reduc-ing the cost to the launch customer, in thiscase the Pentagon. America’s own outlayis being usefully reduced by allied nationspaying part of F-35’s non-recurring costs,in return for limited access to technicalinformation and the promise of a share inthe development and production work(and, in the case of Britain, in actuallyhaving some say in the drafting of theoperational requirement). Investors arealso guaranteed a reduced purchaseprice. In announcing Australia’s partici-pation in the F-35 programme, DefenceMinister Robert Hill stated that the deci-sion to invest (A$ 300 million) had beencalculated to save the Australian Govern-ment twice that amount in the country’seventual purchase.

The F-35 is currently in the systemsdevelopment and demonstration (SDD)phase, capped at $ 28.3 billion. Friendlynations have been invited to invest atthree basic levels. Level One, representedonly by Britain, involves taking a 10 percent share. Level Two, chosen by Italy andthe Netherlands, is for 5 per cent. LevelThree has Australia, Canada, Denmark,Norway and Turkey each providing $ 125to 175 million over a ten-year period.Israel and Singapore both took part in theearlier concept demonstration phase(CDP) as fourth-level FMS (Foreign Mil-itary Sales) participants, and have beenadmitted to the SDD phase as SecurityCo-operation Participants (SCPs). Thisprovides them only with a core data pack-age, and the ability to order specific mod-

elling and simulation studies.The total for-eign investment in the SDD phase appearsto be approximately $ 4.5 billion.

It may be noted that the Pentagon nowappears to be demanding a global systemfor providing spares for the F-35 family,with a contractor (possibly in the form ofa financial consortium) owning stockpilesat various locations around the world,guaranteeing the delivery of spare partson the sort of timescale demanded by air-lines, and charging the operator on a basisanalogous to engine manufacturers’power-by-the-hour. That the same systemwould be available to export customers;indeed the US services would count onother operators adopting it. If the F-35really does result in a production run of4000 to 5000 aircraft, this could revolu-tionise military product support.

The F-35 model of development costsharing is clearly not applicable to all

Probably the best looking of the new European fighters, the Dassault Rafale was short-listed in South Korea, but then lost to the Boeing F-15K. Dassault now hopes to grab awin in Singapore. (Dassault)

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The most successful of the present generation of subsonic advanced jet trainers is theBAE Systems Hawk, shown here in Mk 51 form for Finland. (BAE Systems)

Although backed by extensive experience with the highly successful L-39 series, theCzech Republic’s Aero Vodochody L-159 has yet to make a direct impact upon theinternational market. (Armada/RB)

projects. Firstly, foreign governments willonly be persuaded to invest if their advis-ers conclude that the project is in a classof its own, that it is bound to succeedtechnically and that their country willprobably buy it. In addition, future cost-sharing proposals will depend on experi-ence with the trail-blazing F-35. If it tran-spires that investors (at Level Three inparticular) find that they receive littlework from the F-35, they and others willbe discouraged from making similarinvestments. Press reports indicate thatNorway is currently disillusioned withthe programme. The Royal NorwegianMinistry of Defence has consequentlysigned an industrial participation agree-ment with Eurofighter, regarding thefuture enhancement of the Typhoonweapon system.

It is now being suggested that F-35-style development cost-sharing shouldalso be applied to the US Navy’s Multi-mission Maritime Aircraft (MMA) pro-gramme to replace the Lockheed MartinP-3C Orion maritime patrol aircraft andits EP-3 Aries electronic surveillancederivative. The US Navy currently hasover 300 members of the P-3 family, andits natural Level One partner (corre-sponding to Britain in the case of the F-35) would be Japan, which operatesover 100 P-3s.However, Japan is intent ondeveloping its own P-X to replace its P-3,and is unlikely to pour millions into theMMA. Five other P-3 users (Australia,Canada, the Netherlands, New Zealandand Spain) are allocating serious moneyto upgrading their existing aircraft, andprobably will not have funds available tocontribute to MMA development. How-ever, Germany and Italy have 18 Das-sault Atlantics each, and might decide toreplace them with the MMA.

It thus currently appears that few (ifany) foreign countries will provide the USNavy with significant subsidy in develop-ing the MMA. Furthermore, whereas theF-35 may be widely viewed as “the only

game in town” in its category, some oper-ators may feel that the P-3 replacementalready exists in the form of the NorthropGrumman RQ-4A Global Hawk.

Once an aircraft has been developed,one of the essential factors in achievinglow production costs is to have a single

final assembly line. However, countriesoften accept a higher unit cost as the priceof having their own prestigious assemblyfacility. The F-16, for example, has beenbuilt not only in the United States, but alsoin Belgium, the Netherlands and Turkey. Inthe case of the JSF programme, considera-tion was initially given to having assemblylines at both Lockheed Martin and Boeing,but the current plan is to have only one lineat Fort Worth. There have been reportsthat this line can deal with only 22 F-35sper month, whereas the demand may peakat around 30. Whether this would justify asecond line (for example, at BAE Systemsin the UK) remains to be seen.

User’s ViewpointThe operator can respond to the escala-tion in prices in various ways. One possi-bility is a “buy-to-budget” policy, whichhas recently cut US Air Force procure-ment of the F-22 from 339 (itself reducedfrom the original 648) to 276 units.

Another approach is to buy pre-usedaircraft, although the wisdom of thisclearly depends on such factors as theprevious owner, how it has been stored,how much fatigue life is left, the cost ofrefurbishing and updating, spares avail-ability and how long the new operatorintends to use it.

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Represented by this mock-up shown at the Farnborough 2002 air show, the KoreaAerospace Industries/ Lockheed Martin T-50 is most assuredly guantanteed a domesticmarket of at least 100 units. (Armada/RB)

From time to time a major operatorphases out a type and there are fearsamong manufacturers that the availabili-ty of low-cost pre-used aircraft willdestroy the corresponding market sectorfor years. In reality, such actions rarelyhave a serious effect. For example, whenthe German Air Force phased out theDassault/Dornier Alpha Jet close sup-port aircraft, this had no real impact oneither the advanced trainer or light attackmarket. Portugal and Thailand now eachoperate around 20 Alpha Jets, but thosecountries never represented seriousprospects for a new-build BAE SystemsHawk (for example). Thailand reported-ly bought these Alpha Jets for around $ 27,000 each, and then paid Eads some-thing in the region of $1.5 million each tohave them refurbished. The United ArabEmirates had evidently considered theGerman Alpha Jets at one time, butthought better of it.

On the other hand, early-model F-16A/Bs placed in storage by the US AirForce are having an effect on the market,as illustrated by Thailand recently buying16 to supplement its 36 new-build aircraft(and substitute for eight Boeing F/A-18C/Ds that were cancelled due to budg-etary problems).

As an alternative to buying second-hand, an air force can critically review (ordumb-down) its operational require-ment. Malaysia, for example, was expect-ed in the late 1980s to buy twelve Torna-do strike fighters as part of the eighthproduction batch, but bought 16 Hawk200 light attack aircraft instead.

Long-term leasing cannot make finan-cial sense, but in the short-term leasingcan usefully overcome a budget shortfall,side-step political objections, give an airforce time to consider what it really wantsto buy and bridge the gap until a new gen-eration aircraft becomes available.

For example, because the EurofighterTyphoon will not be available in signifi-cant numbers until 2006 or later, the Ital-ian Air Force leased 24 ex-RAF PanaviaTornado F3s from Britain, and is nowreplacing them with 34 Amraam-operableF-16A/B ADFs, which will be retaineduntil 2010. Likewise, Britain is leasingfrom Boeing four C-17 Block 12s from theUS Air Force line, to bridge the gap until

the RAF’s 25 Airbus Military A400Msbecome available. The C-17 lease will costaround $ 1.125 billion, and run initially forseven years. Britain has to decide byNovember 2006 whether it wants to exer-cise an option to extend the lease by oneor two years. The agreement includes anoption to buy at the end of the lease.

Australia and Canada are both study-ing the lease of C-17s, and in late 2001Congress gave the US Air Force permis-sion to lease up to 107 new-build Boeing767s and four 737s (C-40B/Cs) in order toaddress an alleged chronic shortage oftransport capacity. It now appears that100 767s are to be delivered as KC-767AConvertible Combi tanker/transports(able to carry a mix of passengers and

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Featuring a unique sliding hood arrangement, Eads’ supersonic Mako project couldperform both advanced training and light fighter roles, but needs a launch customer.(Armada/RB)

freight). The lease agreement (like thatfor the C-40B/Cs) has yet to be signed,but will cost around $ 17 billion for sixyears. Deliveries and lease payments aredue to begin in 2006. Post-lease purchasewould cost about $ four billion, but theUS Air Force will have an escape clauseto buy at any stage.

India has leased 16 F-16A/Bs from theUS Air Force since 1997,and is now nego-tiating the lease of four Tupolev Tu-22M3s from Russia.

In line with the modern trend toregional groupings, the best way for a

country to approach the problem ofequipment cost-escalation may be to optout of some non-essential roles and actjointly with one or more other nations inaddressing others.

For example, Belgium has decided tospecialise in humanitarian activities, pre-sumably in the form of disaster-reliefoperations, and is teamed with Luxem-burg on A400M procurement. Regardingthe training of future aircrew, Belgium isexpected to participate in the proposedEurotraining/AEJPT (Advanced Euro-pean Jet Pilot Training) programme,

alongside Austria, Finland, France, Ger-many, Greece, Italy, the Netherlands, Por-tugal, Spain, Sweden and Switzerland. It ishoped to launch this programme around2010 at three bases in northern, centraland southern Europe. Belgium has notjoined the F-35 programme,and it remainsto be seen how (or whether) its 90 remain-ing F-16A/Bs will be replaced when theyare retired in 2015.

New Zealand has opted out of the aircombat business and, in August 2001,offered its remaining Douglas A-4Ks andAermacchi MB-339CDs for sale. Howev-er, the RNZAF is to retain and mod-ernise its transport, maritime surveillanceand utility helicopter assets. Its planningis integrated with that of Australia tosome extent, notably on upgrade studiesfor the P-3 and C-130H.

Denmark, the Netherlands and Nor-way currently have a Deployable Air TaskForce with 18 F-16s and a KDC-10, basedin Kyrgyzstan. It is proposed to extend theforce to include F-16s from Belgium andPortugal. Malaysian MiG-29Ns go to Indiafor maintenance, and the two countriesare discussing a common logistics supportcentre in India for the Su-30MK. Gulf Air-craft Maintenance maintains BAE Sys-tems Hawks for Abu Dhabi and Dubai,and this arrangement may be extended toHawks operated by Bahrain, Kuwait,Oman and Saudi Arabia.

One form of operation that especiallylends itself to jointness is pilot training,provided that language problems can beovercome. The pioneer in this field has

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been the US Air Force-run Euro-NatoJoint Jet Pilot Training (ENJJPT) schemeat Sheppard AFB,Texas. Many Europeanair forces have benefited from this pro-gramme, although the system of tuitiondoes not suit all tastes (Britain’s RAFbeing particularly critical) and someoperators have complained that theyhave to pay for the full syllabus, even ifthe student is washed out after a fewflight hours.

Bombardier’s NFTC (Nato FlyingTraining in Canada) scheme was designedto supplement the ENJJPT, and is attract-ing a growing number of users.Aside fromthe Canadian Forces, Denmark, Hungary,Italy, Singapore and the UK have nowsigned up for training, which is carried outon the Raytheon T-6A (CT-156) and BAESystems Hawk 115 (CT-155), orders forwhich currently stand at 24 and 26 respec-tively. Interestingly, NFTC allows Britishstudent pilots to fly much more advanced(glass cockpit) Hawks than the RAF cur-rently owns.

There is clearly scope for further jointtraining operations, aside from the Euro-training project. Switzerland,Austria andGermany are discussing combined pilottraining, possibly using the Pilatus PC-21.One of the Gulf states could (in princi-ple) start a training system for Arab airforces, assuming that (as in the NFTCcase) most customers provide their owninstructors. Australia and South Africahave both the airspace and the weatherfor large-scale pilot training.

Further joint Nato operations were pre-saged at the summit in November 2002, at

which it was agreed to focus defencespending on critical shortfalls, includingdeployability and sustainability.Under thisPrague Capabilities Commitment, Ger-many is to lease C-17s as an interim meas-ure and to lead a consortium of nationsaimed at pooling airlift resources andcapabilities. Reports indicate that this poolis expected to consist of 14 C-17s and twoAn-124s. Meanwhile, Denmark and Nor-way are to contribute tanker assets toNato, and Spain is to lead a consortium ofnations that have expressed interest inpooling their 17 flight refuelling aircraft.

It may just be possible in some coun-tries to save on expenditure by the

closer integration of its separate armedservice branches.For example, in 2004 theUS Navy and Marine Corps are due tobegin integrating their tactical aircraft

«Poland’s recent purchaseof F-16s was reportedly

helped by Congressallowing the normal

financing rules to be bent…»

Multi-national operations in the Middle East and southwest Asia have served asveritable springboards in demonstrating the requirement for high-volume strategictransports such as the Boeing C-17. (Boeing)

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The Antonov An-70 is to be built in both Russia and the Ukraine, and is currently beingoffered by Russia to a selection of former Warsaw Pact members to cover payment ofcertain debts past due. (Armada/RB)

assets. This is expected to allow severalstrike fighter squadrons to be decommis-sioned and to realise savings of aroundone billion dollars per year. Combinedwith the effect of reducing the number ofaircraft in each deployed squadron fromtwelve to ten, the integration will allowUS Navy and US Marine Corps procure-ment of the Lockheed Martin F-35 to bereduced from 1089 to 680, and in thisinstance, US Navy procurement of theBoeing F/A-18E/F would be cut downfrom 548 to only 460.

Boosts and HeadwindsBefore discussing the various aircraft cat-egories, it may be worth reviewing someof the factors that help or hinder militaryaircraft sales.

Firstly, it should be obvious that the air-craft offered must respond to the opera-tional needs of a large number of potentialusers, at an affordable price, with world-class product support, and that it shouldbe marketed by an organisation that canput together an attractive finance packageand suitable offset arrangements.

allowing the normal financing rules to bebent, so that repayment on principal isbeing deferred from five years to eight(during which time only interest pay-ments will be made), and the loan periodis increased to a total of 15 years.

However, the US Government is notalways on the side of its exporters.Amer-ican bureaucracy often delays salesinvolving defence-related technologyand the US is well known for refusing togive customers full access to informationon the equipment they have bought. TheRaytheon AIM-120 Amraam was sold toSingapore and Thailand on the under-standing that the missiles would be heldin the US on 48-hour call (despite AIM-120s having been supplied to Australia,Japan, South Korea, and Taiwan).

In recent years the US Governmenthas in some cases adopted a bullying tone,indicating that US aircraft can only be

The Pilatus PC-21 is a completely new design, one which is aimed at performing asignificant amount of the syllabus normally flown in an advanced jet trainer, thusreducing tuition costs. (Pilatus)

In a major sale, government assistancemay be of crucial importance. For exam-ple, Poland’s recent purchase of F-16s was reportedly helped by Congress

supplied with US avionics, that a nationfailing to select a US aircraft would notnecessarily be allowed to arm a Europeansubstitute with US weapons, and that fail-ure to buy specific US products (e.g., airdefence systems and torpedoes) couldhave an adverse effect on product supportfor that country’s existing US equipment,and on America’s willingness to assist indefending that country.

Examples of the Governmental prob-lems experienced by US exportersinclude the failure to conclude the sale toTurkey of 50 Bell AH-1Z King Cobras(with 95 more to be licence-built), appar-ently due to America’s unwillingness torelease information on equipment suchas the mission computer. Australia is oneof America’s principal allies in the Pacif-ic, yet Boeing was fined $4.2 million foroffering that country a 737-700 AEW&Cwith improved transmit/receive modules,and for releasing classified radar signa-ture data on various target types. Like-wise, having selected the EurocopterTiger in preference to the Bell AH-1Zand Boeing AH-64D,Australia found theUS State Department raising objections

The Raytheon T-6A is in quantity production for the US Air Force and the US Navy asthe Joint Primary Aircraft Training System (Jpats), and has been ordered by Greeceand Canada’s NFTC. (Armada/RB)

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to Hellfire missiles being supplied for useon the Tiger.

The unreliability of US Governmentsupport for international sales may beillustrated by its attitude to South Africa.Most countries ended the UN-mandatedarms embargo when democracy came tothe Republic in 1994, but (to the fury ofseveral US defence equipment manufac-turers) America maintained its embargo,because of alleged infringements of USpatents on fuzes for artillery ammunition.By the time that Washington realised thata massive arms deal was going down thetubes, Pretoria had decided in principlenot to purchase crucial types of defenceequipment from the US in view of thestrings attached.

Several other aspects of internationalmarketing are illustrated by South Africa’stri-service $ 4.5 billion arms procurementprogramme. For instance, it is instructivethat in both the Alafa (advanced lightfighter aircraft) and Lift (lead-in fightertrainer) evaluations, equal importance wasallocated to scores in three areas: risk-moderated cost-effectiveness, offsets andfinancing arrangements. Offsets werespecified in the form of defence industrialparticipation (Dip) and non-defenceindustrial participation (Nip).

During 1996-97, the BAE SystemsHawk (which was eventually chosen tofulfil the Lift requirement) was removedfrom the list of possibles because of itshigh cost, and since it did not satisfy theSAAF operational requirement. TheSaab/BAE Systems Gripen (ulitimatelychosen as the Alfa) was meanwhile judgedto be unaffordable. The Aermacchi MB-339FD (which was later judged to be theclear Lift winner in terms of risk-moderat-ed military value) was likewise dropped in1996-97 for its low performance and fail-ure to meet the requirement. The moral isto never give up hope!

In early 1998,a request for offers on theAlfa programme was sent to Saab/BAESystems (then BAe), Dassault and Dasa.In the subsequent evaluation by Armscorthe Gripen won. The Dasa AT-2000 (nowEads Mako) won the Dip contest. Das-sault scored badly on both Dip and Nip.Surprisingly, neither the French nor the

German teams submitted detailed financ-ing proposals, while the UK/Swedish teamscored full marks for a package that pro-vided 85 per cent financing over 20 years,and the rest over seven years. In mid-1998,the final Alfa evaluation placed theGripen first, the AT-2000 second and theMirage 2000 third, with 300, 138 and 101points respectively. It may be noted thatthe UK/Swedish proposal, costed at $ 2.234 billion, came with offsets worth $ 8.743 billion, whereas French and Ger-man offset packages were each worth lessthan $ 1.9 billion.There can be little doubtthat BAE Systems’ global business andexperience in arranging offsets (startingwith the 1977 sale of 50 Hawks to Finland)played a major role in this success.

Turning to the Lift contest, when cost-effectiveness, offsets and financing were

The Eads-Casa/Indonesian Aerospace CN-235 programme was a joint developmentthat is now built in both partner countries, this Saudi version is an example of onehaving been constructed in Indonesia. (Armada/RB)

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Following in the footsteps of the Boeing 707, the 767 has now taken over as the basisfor military derivatives, such as the KC-767A tanker/transport and the E-767 AEW&Caircraft. (Boeing)

evaluated and combined, the MB-339FDcame first with 254 points, the Hawk aclose second with 245, and the AeroVodochody L-159 third with 214. Britainagain came first in offsets,with $ 1.278 bil-lion (over twice the contract value), theCzech Republic a close second with $ 1.236 billion, and Italy a poor third with$ 0.43 billion. Faced with choosingbetween the MB-339FD and Hawk, Gov-ernment ministers preferred the Hawk,based on “national strategic considera-tions for the future survival of the (SA)defence aviation sector and the bestteaming arrangements with the respec-tive bidders”. It was also seen as prefer-able to link the Gripen and Hawk pur-chases, in order to simplify negotiationsand financing.

The bottom line was a $ 2.2 billion orderfor Gripens and Hawks, linked to a BAESystems/Saab obligation to provide $ 1.488billion of defence-related offsets and $ 7.2billion of non-defence offsets. The con-tracts include severe punitive measures toensure strict compliance with offset guar-antees. The two companies have met allHawk/Gripen offset milestones, and theoffset programme is running on schedule.The next milestone falls in mid-April 2004,which is the final date at which the SAGovernment could invoke the opt-outclause regarding tranche three of the pack-age, i.e., the 19 single-seat Gripens.

billion for the US Army, giving a total ofaround $ 23 billion.At least 25 per cent ofthat figure relates to modification pro-grammes and spares production, hencethe net cost of buying new-build militaryaircraft in FY2004 will be in the region of$ 17 billion. Since the US defence budgetequates to roughly half the global total,world-wide military aircraft purchasesare presumably worth something in theorder of $ 30 to 35 billion. The US Aero-space Industries Association estimatesthat its members will record military air-craft sales of around $ 39.3 billion in 2003,but this clearly represents far more thannew-build purchases.

Looking at the value of sales in detailand purely in terms of flyaway prices,Richard Aboulafia, Director - AviationConsulting for the Teal Group, estimatesthat on a similar timescale world-wide

The Eads-Casa C-295 is a stretched derivative of the CN-235. Production of its typewas launched by a Spanish order, but Brazil, Jordan, Poland and Switzerland havealso chosen it. (Eads-Casa)

military aircraft production will growfrom $ 29.53 billion in 2006 to $ 32.39 bil-lion in 2007. Over the ten-year periodbetween 2002 and 2011, Aboulafia esti-mates the total value of military aircraftdeliveries as $ 288.77 billion, compared to$ 619.36 billion for civil aircraft.

Fixed-wing Combat AircraftFor FY2004, the US Air Force hasrequested $ 4.445 billion for the procure-ment of combat aircraft. The Teal Groupforecasts global deliveries of fighters ris-ing from 188 aircraft worth $ 7.92 billionin 2002 to a plateau of around 350 units,lasting from 2007 to 2010 (worth $ 16.5 to17.5 billion), before falling to 311 worth$15.7 billion in 2011. Over the 2002 to2011 period, Aboulafia predicts around3000 combat aircraft with a maximumtake-off weight of nine tonnes or morebeing delivered, with a value of approxi-mately $ 142 billion in 2002 values.

The majority of technical develop-ments in the fighter business take place inthe US, Europe and Russia, but in mar-

The baseline IAI/Elta Phalcon AEW&C system is configured with a massive amount ofantennas packed onto a B707 airframe, as supplied to Chile. The Phalcon system hasbeen proposed to India on the Ilyushin Il-76. (Boeing)

OverviewWhat is the sale of new-build military air-craft worth? The largest single customeris obviously the Pentagon, which forFY2004 has requested $12.08 billion forUS Air Force aircraft procurement, $ 8.79billion for the USN/USMC, and $ 2.13

Complete Guide


The latest version of the Lockheed Martin F-16 is the Block 60 ordered by the UnitedArab Emirates, which will have conformal tanks, shown here as a trials installation ona US Air Force aircraft. (Armada/RB)

The four-nation Eurofighter Typhoon benefits from a planned domestic market for 620aircraft, of which 148 are firm. Two follow-on tranches will each cover 236 aircraft.(BAE Systems)

keting terms what was possibly one of themost significant of recent events tookplace in Canberra, Australia on 27 June2002. Just as Eurofighter and Dassaultwere launching four-year marketing cam-paigns to address the Royal AustralianAir Force’s Project Air 6000, DefenceMinister Robert Hill announced theGovernment’s intention to participate inthe SDD phase of the F-35, on the basisof RAAF advice that it would meet Air6000 requirements to replace the F/A-18and F-111. Hill went on to say that,although the intention was obviously toacquire the F-35, that decision would notbe made until about 2006.

However, rather than simply announc-ing Australia’s F-35/SDD decision (asexpected), Hill continued; “So, ratherthan investing in an aircraft that may wellbe out of date within the next 10 to 15years, what we are doing is leaping a gen-eration. In terms of the alternatives thatwill be around in the post-2012 era, wedon’t believe that there is any other alter-native that would meet our capabilityrequirements within the costings that wehave put in the White Paper”.Asked howthe F-35 compared with the Rafale andTyphoon, Hill said, “The Air Force gaveus advice that there really wasn’t, in termsof capability, a competition. This aircraftis at least a generation ahead of the otheralternatives”.

In the early postwar period, havingsevered its links with Britain’s RAF,Aus-tralia’s RAAF was widely regarded as anindependent market-leader in aircraftacquisition, its selection of the AermachiMB-326 and Dassault Mirage IIIundoubtedly helping sales of those air-craft. Whether the same is true today isopen to debate. It is clear that Australiahas become closely aligned with Americain recent times, as evidenced by its sup-port for America over Iraq.

The Australian argument is presum-ably that nothing can compete with thereduced radar signature (and relatively

low cost) of the F-35. This assumes that afull-stealth F-35 will be made availablefor export, although that decision may bemany years off. It also assumes that nosignificant signature-reduction can beachieved for its European competitors,although Eurofighter is known to have aTyphoon Enhancement Programme(TEP) and Dassault presumably has sim-ilar plans for the Rafale.

Above all, the Australian Departmentof Defence appears to have accepted thePentagon’s view, that F-35-level stealthwill be of overriding importance in airoperations for the next half-century. Ifthis is an accurate assessment, then five ofthe principal European air forces areeither deluding themselves, or are strug-gling with the temptation to cancel exist-ing orders.

Before leaving Australia’s decision, itmay be noted that it abandons the pref-erence for twin-engined combat aircraft,which at the time of the F/A-18 selectionwas a major factor. The RAAF plan forthe F-35 (to begin replacing the F/A-18 in2012 and the F-111 from 2015) has forcedthe service to launch a two-year study

into the possible need for an interim type.Leases have been proposed by BAE Sys-tems on the Typhoon, and by Boeing onthe F/A-18E/F. Significantly, the RAAFhas also had discussions with the US AirForce on leasing F-15Es.

Around 227 Boeing F-15Es willremain in US Air Force service until atleast 2030. Production was set to end withthe last US Air Force aircraft in 2004, butthe South Korean order for 40 F-15Ks(plus 40 on option) will keep the lineopen until at least 2008. It is being mar-keted in Singapore as the F-15T with theRaytheon APG-63(V)3 AESA radar, andcould attract follow-on orders from Israeland Saudi Arabia.

Following small-scale sales to Angola,Ethiopia, Syria and Vietnam, the SukhoiSu-27/30 series is enjoying well-deservedsuccess in China and India. In 2002, Indiabecame the first country in the world toplace in service a supersonic thrust-vec-toring fighter (Su-30MKI). Brazil’s pre-ferred choice was reportedly the Su-35(formerly Su-27M), but the new govern-ment has suspended the programme.

Lower down the scale, Malaysia wantsto trade in its eight Boeing F/A-18Dsagainst up to 18 F/A-18Fs, but the RMAFalso wants to buy 18 Su-30MKMs, andhave its 16 MiG-29Ns upgraded. TheUSN has requested FY2004 funds tobegin the SDD phase of the EA-18Gelectronic attack derivative, with 78 air-craft planned.

Whether the MiG-29SMT with 50 percent more internal fuel can breathe lifeinto the series remains to be seen. Themost interesting order is for 46 carrier-capable MiG-29Ks for the Indian Navy.The underrated Dassault Mirage 2000might yet be the subject of an Indianorder for 126 aircraft, including 90licence-produced.

Based only on French Governmentorders, Dassault and its partners areunable to produce the Rafale at an eco-nomical rate, and they are now beingobliged to fund development to improveits chances in the export market. Havingfailed to win the South Korean order,Dassault is hoping for a level playing fieldin Singapore.

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The Ericsson Erieye AEW&C system, seen here, is used by the Swedish Air Force onthe Saab 340, but can also be carried by the Embraer EMB-145SA, as adopted byBrazil and Greece. (Ericsson)

The Eurofighter Typhoon appears tobe better powered than the baselineRafale and its price should benefit from ahigher production rate. Greece and Aus-tria have selected the Typhoon, but bothdeals have been stalled by funding prob-lems. Reports indicate the launch of thesecond domestic production tranche hasbeen delayed.

Saab/BAE Systems is also sufferingfrom its customers’ funding problems,which resulted in the Czech purchase of24 Gripens being cancelled. However, theHungarian ten-year lease of 14 Gripens isgoing ahead, and the South African pur-chase of 28 aircraft is looking good.

TrainersThe Teal Group predicts that deliveries ofmilitary trainer and light attack aircraftwill rise from 148 aircraft (worth $ 1.48 bil-lion) in 2002 to just short of 200 units annu-ally from 2006 to 2009, before falling to 154in 2011.Over that ten-year period,RichardAboulafia estimates that global produc-tion will total 1726 aircraft worth approxi-mately $ 11.5 billion in 2002 values.

The undoubted leader in this categoryis the BAE Systems Hawk. Around 600Hawks have been ordered, and the com-pany has a significant production share inthe Boeing T-45 Goshawk. BAE refers toa market for around 1500 aircraft in this

category over the next 15 years, andhopes to win sales of 400 to 500 moreHawks. Like the Aermacchi MB-339FD,the Aero Vodochody L-159 appears tosuffer unfairly from a dated image.

The twin-engined Aermacchi M-346has a very high thrust/weight ratio, and afly-by-wire control system that can bemodified to simulate specific operationalaircraft. It is also designed to fly to high

angles of attack.Aermacchi estimates thatthere are around 3400 advanced trainersin service, 65 per cent of which have beenin service for more than 25 years.The com-pany sees a potential market for 2300replacements over 30 years, and hopes towin orders for 300 to 400.

The M-346 seems likely to be adoptedas the Eurotrainer. Eads is nonethelesspromoting the supersonic Mako, but devel-opment is unlikely to go ahead without alaunch order. The other new supersonictrainer is the Korea Aerospace Indus-tries/Lockheed Martin T-50, which firstflew in August 2002. A domestic market ofat least 94 is assured, and the manufacturerhopes to export 600 within 25 years.

In the turboprop trainer market thestandard is set by the Raytheon T-6,derived from the Pilatus PC-9. However,Pilatus hopes to leapfrog the T-6 with theall-new PC-21, which is clearly aimed, in afirst step, at the British RAF market.Embraer continues to pick up small-scaleorders for the Super Tucano.

Regional transports provide a suitable basis for maritime patrol aircraft, as evidencedby this Indonesian Navy Aviation CN-235MPA, which was exhibited at the Paris AirShow of 1997. (Armada/RB)

Dassault has proposed an Atlantique 3 (ATL3) with Rolls-Royce AE2100D powerplantsand a new mission system, but it could possibly eventuate as an ATL2 upgrade.(Armada/RB).

TransportsOver the ten-year period from 2002 to2011, the Teal Group forecasts thatapproximately 542 military transportswill be completed,with a combined worthof around $ 43.9 billion.

The big winner is the 263-tonne Boe-ing C-17, of which the US Air Force plansto buy at least 180 – and probably 42more.As indicated earlier, the C-17 couldwell become the standard Nato strategictransport, if only through leases.

Lower down the turbofan range arethe 200 tonne Ilyushin Il-76MF, Japan’s150-tonne C-X project,and the 103-tonneTupolev Tu-330, which employs the wingfrom the Tu-204. The twin-turbofanHAL/Ilyushin Multi-role Transport Air-craft (MTA) or Il-214 is in the 55-tonneclass, which generally uses turboprops forbetter airfield performance.

The 124-tonne four-turboprop AirbusMilitary A400M (due to be launchedshortly with a seven-nation order for 180)

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is a lightweight in comparison with the C-17, as is the 130-tonne four-propfanAntonov An-70,which is to be produced inboth Russia and the Ukraine. The CzechRepublic is to accept two An-70s fromRussia under a debt-repayment plan, andHungary and Poland may follow suit.

The 80-tonne Lockheed Martin C-130Jwas last March the subject of a six-yearPentagon order for 40 CC-130Js for theUS Air Force and 24 KC-130J tankers forthe US Marine Corps, bringing the globaltotal to 178. The US Air Force roadmapcalls for 150 Combat Delivery CC-130Jsand 18 Special Missions aircraft (ten WC-130J Weatherbirds and eight EC-130JCommando Solos), and at least 280 C-130E/Hs upgraded by Boeing. The USMarine Corps, the only service to use theKC-130 series in significant numbers,plans to buy a total of 59 KC-130Js.

Lower down the turboprop spectrum,the twin-engined 32-tonne Alenia/Lock-heed Martin C-27J competes with the 23-tonne Eads-Casa C-295 and the 16.5tonne Eads-Casa/Indonesian AerospaceCN-235. Of the two new aircraft, the C-27J provides the largest cabin cross-sec-tion, and powerplant and cockpit com-monality with the C-130J, but the C-295(selected by Spain, Switzerland, Poland,Jordan and Brazil) is less expensive. TheC-27J (ordered by Italy and Greece) washurt by the selection of the CN-235-300Mfor the US Coast Guards Deepwater pro-gramme, but there are hopes of a USArmy contract.

In the field of tankers, Boeing isexpected to be the big winner, with theUS Air Force set to lease 100 KC-767As,based on the 767-200ER. This pro-gramme was launched by Italy, followedby Japan, each ordering four.There are sofar three versions, differing in refuellingprovisions and cabin options. In total, theUS Air Force has to replace about 550KC-135s and 59 KC-10s (not necessarilywith a single type), so the US Air ForceKC-767A lease will be only the start.

tralia and Turkey have adopted the 737alternative with a Northrop GrummanMesa radar. Boeing hopes to sell over 30more 737 AEW&Cs. The current Ameri-can alternatives are new-build NorthropGrumman Hawkeye 2000s and refur-bished ex-US Navy E-2Cs.This last optionhas been adopted by Egypt, and isbelieved to have been chosen by the Unit-ed Arab Emirates.The Hawkeye 2000 is tobe followed in the next decade by theAdvanced Hawkeye, benefiting from aradar-modernisation programme (RMP),a glass cockpit and eight-blade HamiltonSundstrand/Ratier Figeac propellers.

The other principals in the AEW mar-ket are the IAI/Elta Phalcon (as sold toChile) and the Ericsson Erieye radar, asused on Sweden’s Arguses (Saab 340s)and on Brazil’s and Greece’s EmbraerEMB-145SAs. Although Israel wasforced by the United States to cancel thesale of four Il-76-based Phalcons toChina (costing $ 350 million in compen-sation), the sale of three to India seemslikely to go ahead.

The potential market for maritimepatrol aircraft (MPA) may amount(excluding the CIS and China) to around400 aircraft worth perhaps $ 40 billion.This will be analysed in some detail inissue 6/2003, but (as discussed earlier) thebig winner is likely to be the US Navy’sMMA, which could eventuate as a Lock-heed Martin Orion 21 or a Boeing 737-700MPA.Japan’s P-X,Britain’s BAE Sys-tems Nimrod MRA4 and France’sDassault ATL3 may remain purelynational programmes.There is still a mar-ket for refurbished and upgraded ex-USNavy P-3s, such as the L-3 Communica-tions Procyon QR proposal and theEads-Casa reworked P-3s for Brazil.Meanwhile, maritime patrol versions ofthe ATR42/72, C-295 and C-27J will pre-sumably sell in small numbers. It is antic-ipated that the Persuader MPA version ofthe C-295 will be launched by a UAEorder for four.

The Eurocopter Tiger is available in various versions, with provisions for a mast-mounted sighting system and advanced guided weapons. The Australian version willemploy Hellfire missiles. (Eurocopter)

The US Marine Corps is to have 100 Bell UH-1N Hueys upgraded to UH-1Ys, withfour-blade main rotors, uprated engines and modernised cockpits and sightingsystems. (Bell)

Facing off in the British contest are ex-BA 767-300ERs, which are competingwith new-build tanker/transport AirbusA330-200s. The B767 and A330 will alsocompete in Australia.

Turning to AEW&C aircraft, Japanlaunched the E-767 (based on the 767-200ER) with an order for four, but Aus-

«The potential market formaritime patrol aircraft

(MPA) may amount(excluding the CIS andChina) to around 400aircraft worth perhaps

$ 40 billion.»

Complete Guide


HelicoptersRolls-Royce, teamed with the Teal Group,recently presented a forecast of turbinehelicopter demands for the ten-year periodfrom 2003 to 2012, predicting that approxi-mately 3800 military helicopters would bedelivered new-built, and there would bejust less than 1500 major engine-relatedupgrades. Over that period, military heli-copter sales will be worth almost $ 60 bil-lion. Expectations have been depressed bycutbacks in (for example) the Boeing Siko-rsky RAH-66 Comanche (now down to 650for the US Army), but paramilitary saleswill benefit from the needs of the US CoastGuard Deepwater programme (Bell HV-911 Eagle Eye drone selected) and the USHomeland Defense Agency.

Global sales of new-build aircraft willbe affected by the US Army retiring 400Bell AH-1Fs and planning to phase out 700Bell UH-1Hs. Another factor is a series ofmajor upgrades. The US Army plans tohave approximately 1200 Sikorsky UH-60As, 500 Boeing AH-64As and up to 430Boeing CH-47Ds upgraded to UH-60Ms,AH-64Ds and CH-47Fs respectively. TheUS Marine Corps is to have 180 Bell AH-1Ws and 100 Bell UH-1Ns upgraded toAH-1Zs and UH-1Ys standards. New-build programmes include the RAH-66 forthe US Army and the US Navy’s SikorskyMH-60R and -60S, while the US Air Forcehas a requirement to replace 105 SikorskyHH/MH-60G Pave Hawks.

Volume 27, No. 3, June/July 2003

ARMADA INTERNATIONALis published bimonthly in Zurich, Switzerland.Copyright 2003 by Internationale Armada Aktien-gesellschaft, Aeulestrasse 5, FL-9490 Vaduz,Principality of Liechtenstein

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The Kamov Ka-50series has beenselected by RussianArmy Aviation, oneversion is alsoavailable as thetandem-seat Ka-50-2and the Ka-52 withside-by-side seatingas illustrated here.(Kamov)

This Royal Malaysian Navy AgustaWestland Super Lynx Mk 100 (with Rolls-RoyceGem engines) the second of a batch of six is shown here at the Farnborough 2002 airshow just prior to delivery. (Armada/RB)

«…the Boeing AH-64, […]has so far dominated

international sales – butwithout new orders the line

is expected to close in2006…»

Although trends in combat helicop-ters are discussed in a separate report inthis issue, mention must be made of theBoeing AH-64, which has so far dominat-ed international sales – but without neworders the line is expected to close in2006, pending a Block 3 upgrade for theUS Army. The Bell AH-1Z was selectedby Turkey and the Tiger by Australia.TheKamov Ka-50 series are strong con-tenders: the Ka-50-2 is short-listed withthe AH-1Z in Turkey, and the Ka-52 isalongside the AH-64 and AH-1Z inSouth Korea. In the longer term theRAH-66 could export well, if available infull-stealth form.

Operations in Afghanistan have rein-forced the Vietnam-era need for helicop-ters to move ground forces over difficultterrain. The products that may benefitfrom such demands include the Euro-copter EC725 Cougar, NHIndustriesNH90 (now ordered by nine Europeancountries), EH Industries EH-101 (pro-moted in America as the US-101), theSikorsky S-70A and the new Agusta/BellAerospace AB139, which might be regard-ed as a true Huey-replacement.

In a naval context, the demand formulti-role armed helicopters is being metby the AgustaWestland Super Lynx 300,Eurocopter AS565 Panther, Kaman SH-2G and the Sikorsky S-70B. Deploymentof the tilt-rotor Bell-Boeing V-22 Ospreywill depend on the results of the currentseries of flight trials. a

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