Forum Sur l'Armée AlgérienneNovember 13th, 2009
By DEFENSE NEWS STAFF/defensenews.com
Major American and European defense companies, facing potentially tighter spending at home, see the Middle East market as increasingly important and are planning for a major presence at the Dubai Air Show.
Boeing will have a broad focus at the show, covering air mobility and integrated air and missile defense, said Jeff Johnson, vice president of business development for the Middle East for Boeing IDS. It will bring the 737 airborne early warning and control (AEW&C) aircraft it’s building for Australia’s Project Wedgetail. The United Arab Emirates Land Force’s Apache Longbow helicopter, built by Boeing, will be on display, as will Boeing’s AH-6 light attack/reconnaissance helicopter and the F/A-18E Super Hornet, Johnson said.
The U.S. Air Force will perform daily demonstrations of Boeing’s F-15E Strike Eagle, and Boeing also will be demonstrating the Vigilare air defense command-and-control system with a simulator. The company also sees the Middle East as a market for its C-17 cargo airplane and Chinook helicopters.
“The last three years, with some of the oil prices going up and the modernization in the gulf and in the region, the large U.S. production lines like Chinook, Apache, C-17 offered great capabilities to customers that are looking at smaller fleet numbers,” Johnson said. “The sustainment road map is there, so they are taking advantage of the U.S. production lines and investments as part of their reset.”
Boeing wants to add the UAE as a Wedgetail customer to fill that country’s requirement for airborne early warning and control. It’s marketing the F-18 Super Hornet to Qatar and Kuwait. Boeing earlier this year sold four C-17s to Qatar, which used the plane for humanitarian missions to Indonesia, creating a lot of interest among other Middle East countries, Johnson said.
Lockheed Martin also is bringing loads of equipment, including the F-16 Fighting Falcon, which will do aerial demonstrations along with the F-22 Raptor that the U.S. Air Force is bringing. Lockheed’s exhibit stand will cover products from the THAAD, PAC-3 and Hellfire/DAGR missiles and its TPS-77 Tactical Transportable Radar System to its Aerostat airborne surveillance system and products for maritime port security, according to Pat Dewar, vice president of corporate international business development for Lockheed.
“Lockheed Martin has the most capable and affordable fourth-generation combat aircraft [F-16] and the only fifth-generation aircraft [the F-35] available in the market today,” Dewar said. “Many countries within the Middle East are flying or keenly interested in flying these aircraft.
“Further, our Littoral Combat Ship and variants of the U.S. Navy design are of keen interest to several countries, including some in the Middle East,” he added.
Lockheed is rumored to be in discussions with Oman over the sale of additional F-16s to add to its fleet, but Dewar declined to comment, citing Lockheed’s policy regarding foreign military sales that haven’t been announced by the U.S. government.
The Middle East should remain an opportunity spot for defense companies, said Richard Aboulafia, a defense and aerospace analyst with the Teal Group in Fairfax, Va.
“Despite the world economy slowdown, oil is stubbornly expensive, so there’s lots of cash to keep up the pace of arms purchases” in the Middle East, with a scarcity of domestic weapon makers, Aboulafia said. “Given a declining defense budget at home, U.S. defense contractors are going to resume their focus on export markets because it’s their only hope for growth.”
According to the Aerospace Industries Association, sales of U.S. defense goods to Egypt, Iraq, Israel, Kuwait, Pakistan, Qatar, Saudi Arabia, Turkey and the UAE totaled $3.2 billion in 2008, down from almost $3.8 billion in 2007 and almost $4.7 billion in 2006.
Loren Thompson, a defense industry analyst with the Lexington Institute in Arlington, Va., said international sales, including in the Middle East, will become more important over the next four years than they have been for decades.
“The tactical aircraft market in the Middle East is probably going to be as hot as it has been at any time in recent memory because oil prices have stabilized and people in that part of the world understand that there are a lot of threats to their sovereignty and security,” Thompson said.
The biggest opportunity for defense contractors is likely to be Saudi Arabia’s effort to modernize its Eastern Fleet. Lockheed is eyeing that plan for sales of its LCS, Thompson said.
Big contests and contracts to watch for at the show include the possible UAE signing of four C-17s it ordered in February; Kuwait’s outstanding fighter requirement to replace its Hornets; a possible move by Saudi Arabia to buy 72 F-15s, helicopter interest and additional C-17 and C-130 sales, Aboulafia said.
Italy’s Finmeccanica arrives at the show hoping it can soon sign to sell 48 M-346 jet trainers to the UAE, following the gulf state’s selection of the aircraft in February.
However, the catalyst for a contract may lie in Rome, where the Italian government’s plan to buy 15 of the trainers for the Italian Air Force is bogged down by bureaucracy.
Finmeccanica CEO Pierfrancesco Guarguaglini has hinted that red tape had forced him to slow down talks with the Emirates, which has said it does not want to be the first country to buy the new aircraft.
When the 1 billion euro ($1.5 billion) deal is done, the Emirates will own 48 of the advanced trainers, including 20 in light-fighter format. After the three M-346 prototypes built to date notched up 1,000 flights this month, Aermacchi, the Finmeccanica unit which builds the trainer, said it was “close to complete maturity.”
Finmeccanica officials have said they will pitch their C-27J tactical transport aircraft and ATR 42 maritime patrol aircraft to the UAE and are seeking a strong relationship with the state through local joint ventures and technology sharing.
Finmeccanica teamed to develop composite material technologies with UAE investment agency Mubadala Development Agency, which may also operate a local assembly line for the M-346. A deal was struck this year with Abu Dhabi Autonomous System Investments to design and develop medium-altitude UAVs.
Finmeccanica unit Selex Sistemi Integrati set up a joint venture in 2005 with Abu Dhabi Ship Building (ADSB) through which Selex is integrating combat systems on the six-vessel Baynunah corvette program. The same joint venture was then contracted to supply command-and-control equipment for 12 new UAE fast patrol vessels.
For France, the UAE’s announced intention to buy some 60 Rafale combat aircraft carries the hopes of industry and the Paris government of export into the region of the twin-engine strike fighter from Dassault Aviation.
Paris sees the opening earlier this year of a permanent French naval base at Abu Dhabi as anchoring close bilateral defense with the United Arab Emirates and helping smooth the way for the Rafale sale.
The UAE Air Force is understood to be looking to acquire the most advanced version of the Rafale.
“They want the best aircraft, nothing off the shelf or standard,” a gulf-based defense official said.
But first, France must help the UAE dispose of the present fleet of Mirage 2000-9s to make room for the Rafales. One option is for France to buy back the Mirage 2000-9s and hold them until a buyer can be found. Industry looks to 2012 as “an indicative date” for delivery of the Rafale to the United Arab Emirates, allowing time for Paris to find a buyer for the Mirages, one defense executive said.
Kuwait has also recently expressed interest in buying the Rafale.
In trainer aircraft, Thales is understood to be bidding to supply the radar for the Aermacchi M346 light combat and trainer jet for the UAE.
Aerial refueling also is a topic of interest in the region.
The UAE has ordered three Airbus A330 multirole tanker and transport aircraft and is potentially interested in adding to the buy, Airbus Military executives have said.
“The air tankers have always been a priority,” the gulf defense official said.
The UAE Air Force is familiar with American and British refueling aircraft, which were based in Abu Dhabi for the Southern Watch operation that policed the no-fly zone over Iraq.
Saudi Arabia has asked Thales to supply maritime patrol equipment for a Casa 295 aircraft. Thales won a deal to upgrade two UAE Air Force Bombardier Dash 8-300 aircraft with a maritime patrol system.
To support export efforts, the French Air Force is sending two Rafales and the Patrouille de France flying display team to the show.
With Typhoon deliveries to Saudi Arabia now underway and a procurement by the Omani government on the agenda, the Eurofighter jet, this one a British Royal Air Force aircraft, will debut at the Dubai Air Show. Britain secured an order for 72 Typhoons from the Saudis in 2007 and has already delivered the first six aircraft.
Speculation last year said Saudi Arabia could add another significant batch of aircraft to its fast jet fleet; that ambition remains unfulfilled, but most U.K. analysts say it is a case of when, not if.
Reports from the region in 2008 also linked Oman to a possible purchase of the multirole Typhoon to replace the remaining Jaguar strike aircraft the gulf state has in an Air Force that also operates Lockheed Martin F-16s.
One executive said it’s possible the Omanis eventually would go for a single-source fleet of multirole Typhoons, quitting both the Jaguars and the F-16s.
Talks are underway between the British and the Omanis on a possible Typhoon buy, but a deal is unlikely for some months yet. One issue to be resolved is how best to support the machine in the gulf region. In Saudi Arabia, the short-term answer to that problem was the signing earlier this year of an initial three-year contract covering aircraft maintenance, pilot and technician training and provision of certain airfield infrastructure to support Typhoon operations.
A second industry source said that Eurofighter partners are also eyeing Qatar, Bahrain, Kuwait and even Abu Dhabi if the long-mooted deal with Rafale builder Dassault falls through.
A spokesman for Eurofighter said the “short-term potential for Typhoon in the gulf is very good.”
The Defence Security Organisation, which leads the British government defense export effort, said it was “well aware that air forces in the region are looking to modernize their capabilities. Should they be looking for a multirole aircraft, Typhoon is well placed and a strong competitor.”
Like India and Japan, the other potential major purchasers of the Typhoon, Saudi Arabia and Oman will be watching what decision the Eurofighter partners make regarding a program to equip the fighter with an active electronically scanned array radar (AESA). A decision was expected this year but may be slipping slightly right.
Sweden’s Saab is already flight testing a Selex-developed AESA radar installation for its new Gripen NG variant, with export campaigns in Brazil and India the immediate targets. Tony Ogilvy, the Gripen vice president of international marketing at Saab, said the Swedish fighter maker is keen on pushing the aircraft’s capabilities in the region.
“The current focus at the moment is on Qatar and Oman, but there are other re-equipment programs coming up in the region which will be of interest,” he said.
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Antonie Boessenkool in Washington, Andrew Chuter in London, Tom Kington in Rome and Pierre Tran in Paris contributed to this report.
