Defence Industry News Clips

FSTA GOSSIP .... There are those who see aircraft conversion as the best way forward – and then there's everyone else. The present plan has always seen the BAES/Boeing-led TTSC team offering ex-British Airways Boeing 767 aircraft, then converted to an IFR role. On the other side of the equation, AirTanker has based its bid around new-build A-330-200s, converting them towards the end of the build period. TTSC has always said that the costs of new-build aircraft are simply too high. But Defence Analysis hears gossip in RAF and MoD circles that puts a new perspective on the matter. The talk's starting point is the Nimrod MRA4 programme. This was – well, we suppose still "is" – based on upgrading and refurbishment of existing airframes.

Easy, no? Ooops! Not really as it has turned out. Now, it's true that Nimrod – and the P-3 Orion too for that matter – suffered from being manufactured at a number of different locations, this leading to anomalies in build standards. In theory, as all Boeing aircraft are built in Seattle, Big B's aircraft shouldn't produce such trouble. But there is concern that the matter of build standard variations between batches of Boeing aircraft, as well as differences deriving from varied maintenance standards, might lead to a Nimrod-like problem with any second-hand aircraft conversions. This school of thought says play it safe, opting for new-build aircraft every time. While not a killer argument, so far, it is interesting to see how many facets of the FSTA debate reflect the A-330-200.

HUNGARIAN PLANS FOR ACQUISITION of a complete range of new models to replace its entire military B vehicle fleet appear to have reached an impasse, with the programme being suspended in mid-January. The full reasons for the hiatus are unclear but appear to stem from legality objections raised by one of the prospective suppliers following selection of what is said to be a non-compliant type of vehicle, one which is more highly-priced than fully-compliant competitors. The selection was announced subsequent to a rushed decision made consequent to an earlier prolonged programme pause prompted by Hungary's 2002 elections. This merits some close attention so, as the saying goes, watch this space!

THERE IS NORMALLY A RULE that if one side of a traditional rivalry buys equipment, or a type of equipment, from one source then the other will buy something totally different. This is a rule that is generally absolutely proven. However......Reports from Paris say that France is close to inking a government-to-government agreement with India for design and supply of six Scorpene Air Independent Propulsion submarines. So? Well this is the same type of sub that has been selected and is being built by.....Pakistan! Strange – amazing even – how French companies can do a Basil Zahanoff, selling to both sides of a (potential) conflict. But it also represents another move in the bitter struggle to sell SSKs round the world. Defence Analysis estimates that an Indian sale would bring DCN closer towards the Germano-Swedish submarine consortium that seen success in South Africa, Singapore, Spain, Italy, and Greece. It's also worth noting that the French MoD regards any Indian deal as being undertaken by Thales and DCN – that, in effect, Thales is the export prime.

FRANCE'S NATIONAL ASSEMBLY has passed the loi de programmation which gives authorisation for the French MoD to spend a total of 88.87 billion Euros during the six year period on procurement. This represents an annual average of 14.84 billion Euros, compared with 13 billion Euros in the previous loi de programmation, a rise of 15%. The vital procurement programmes during this period are a second aircraft carrier and a fourth SSBN, followed by the Horizon AAW ship and the start of the multi-mission frigate programme. What is interesting is that in coverage of this announcement in the French press, most newspapers and wire services say "If this law is actually applied …" – and there is obviously still concern that the French budgetary position is such that there could be a clawback of funds from MoD by the Finance Ministry.

THE ANGLO-SWEDISH GRIPEN team is surprisingly calm about the past few months. The cancellation of the Czech Republic order, the loss in Poland – you would think that the team would be quite upset, even distraught. But, evidently, the calm that exudes from leading Swede, Sven Goran Ericsson, applies too to all members of the team. Gripen International believes that there are some more hurdles to cross before Poland can sign the F-16 order – and Polish rules say that if the first recommendation does not make the grade then the second is called forward – Gripen is that Number Two.

Meanwhile, there is a belief that Gripen can win again in the Czech Republic. A new tender is due for issue in late February/early March, again for 24 aircraft but with options for second-hand or leased units. Gripen International believes that as it won relatively easily the first time – on performance, cost, offset, financing etc. – there is no good reason why this success shouldn't be repeated. Also, a reassessment of the Austrian programme makes Gripen International believes it can edge out Typhoon costwise – offering as many aircraft but at half the cost. Overall, a very bullish set of optimistic attitudes. Can they become realities? That's the question. Certainly, if the Gripen sales team meets setbacks as previously and can then turn them into victories it will have shown immense bottle.

FOLLOWING ON FROM THE Polish fighter deal, Paris got mad at the facts that (A) The Dassault Mirage 2000 lost, and, (B) there are signs that some of the cash that Warsaw will use to pay for the F-16 will come indirectly from the European Union, with transitional funding for Poland as it joins the EU. What France can do about this is uncertain – there has been talk of getting EU funding to Poland cut back by a substantial number of Euros. But this would hardly impress Warsaw of the case for buying the Mirage 2000. As expected, the French veto of full funding for Polish agriculture went down, as our charming Antipodean brethren say, "Like a bucket of warm sick".

WHAT IS HAPPENING OR MIGHT HAPPEN to Brazil's fighter deal is open to debate. President Lula has officially postponed the FX project – "Food, not Fighters!" – and a small lease looks as if it will go ahead pending re-launch of FX in 2004. In Defence Analysis's view, one area of doubt is how well the various contenders actually did in the original contest. Embraer has been championing the Mirage 2000/5, as this would give the Brazilian airframer the highest content for offset. But most every other report says that technical assessments, as well as overall offset, have not favoured the Team France offering. Some reports say that the Su-30 is the Air Force's choice – understandable: a big, macho aircraft. Others say that Gripen won the technical evaluation. All the Swedes will say about the FX contest to date is that the assessments is that they were the most thorough and professional that they have ever participated in.

MANY INDUSTRIAL AND REGIONAL observers see the fighter contest in Singapore as key to the futures of both the Dassault Rafale and Eurofighter's Typhoon. Both need confirmed export sales – Typhoon's "wins" in Greece and Austria do not count until the ink is dry, and local pilots are going up-diddly-up-up – and, ideally, both need such sales outside Europe. And the most immediate such export contest is in Singapore. The contest looks to be between the two European offerings and the Boeing F-15, the same version offered to South Korea. It would seem that for the moment, as long as Malaysia proceeds with an F/A-18 E/F Super Hornet deal, there is no chance of the island city/state buying that aircraft (see earlier in this section).

Observers still see the Typhoon campaign as lacklustre and not as proactive as it should be – certainly not when compared with the other contenders. The key for Typhoon is to offer as much work as possible – direct work – on the platform. Another is a tie-in to the RAF, as tightly as possible: the British service will operate two aircraft fleets, Typhoon and JSF, and co-operation with the RAF would be attractive to Singapore. However, spats between the RAF, MoD, and Eurofighter do not bode well for such collaboration here. Rafale might have been fatally wounded by the loss in South Korea – that saw the death of the M-88-3 hot-and-high engine development, not a good omen for Asian sales. If Rafale cannot get Singapore, it is difficult to see where it can succeed in the next decade. Write it up as F-15 first, possibly Rafale second.

EUROCOPTER IS VERY BULLISH about 2003 and appears sure that Spain will come forward and order 24 Tiger attack helicopters this year in a 650 million Euros deal. We assume that this figure possibly does not include long-term support and maintenance and weapons, as it adds up to a brute cost of Tiger as 27 million Euros – France's Tigers are slated to cost 34 million Euros apiece. Any deal will allow deeper integration of Casa with EADS, as well as allowing Spain to join OCCAR, the European procurement agency.

The contract would see Madrid signing in mid- 2003, and Spain would receive the first six helicopters – those originally destined for the French ALAT, in 2004, with the remainder in 2005 – a big production rush. However, will "Spanish Version" helicopters replace those destined for France, as a budget-cutting measure? Contract signature with Greece for 42 NH90s is also expected in mid-2003. The first nine Tigers will be delivered to the French and German armies in 2003, and the first NH90s in late 2004. Notions of Eurocopter and Sikorsky signing a joint venture to market CH-53 in Europe are foundering on a very simple feature – the lack of any quid pro quo for attempts to get NH90 into the US market. With the S-92 as Sikorsky's offering, there is little chance that the American company would wish to bring NH90 into the marketplace.

• PUBLISHED ON DSD @ BAES Sea Systems Restructuring - SEA CHANGES FOR BAES
• Continuing BAES/MoD Row - SO MUCH FOR AN INDUSTRIAL POLICY!
• Royal Navy Future Carrier - FINE FINESSE OR FULL FAT FUDGE?
• Deployment Doctrine - DIFFERENT STROKES
• A400M Programme - GETTING A MOVE ON
• British Army Wheeled Tanker Programme – And Aftermath - A RUSH OF BLOOD
• Royal Navy Escort Numbers - AND WHEN THEY GOT THERE …
• US Army Budget 2003 - HE AIN'T HEAVY
• BAES Project Problems: The Aftermath - MORE RUMBLES IN THE JUNGLES
• European Naval Programmes - NOT A BAD BUSINESS
• Comparison of BAES Sea Systems and DCN - ON DIFFERENT PATHS?
• Nimrod and Astute Programme Histories - SPREAD THE BLAME?
• Nimrod v Typhoon Procurement Policies - GOOSE AND GANDER TIME?
• British Army Light Forces Anti-Tank Guided Weapon - THE BED HAS BEEN MADE
• UK Deployment to Gulf Region - SHOWING THE POWER
• Kuwait Deployment: Early Lessons - KEEP IT ALL AT SEA
• DEFENCE INDUSTRY NEWS
• DEFENCE DIVERSITY

REF XQQDA XQQEE XQQSA