A version of this article appears in the July 14 edition of Aviation Week & Space Technology.

Two factors are likely to dominate the fighter market that is accessible to Western-aligned manufacturers over the next decade. The first could be termed “F-35 versus the world.” The Joint Strike Fighter business plan, as shown in official briefing documents, envisages the close of production for all other U.S. and European fighters before 2020. Although there are U.S. studies starting up that point to follow-on fighters, and Japan, South Korea and Turkey have aspirations to build new aircraft, none is likely to have a great impact on the market before 2024.

Some large market segments are still no-go areas for the F-35, including the Middle East and nations such as Malaysia, where the U.S. is unwilling to export stealth technology. The F-35 has not been an option for countries such as Brazil or India, which regard every major defense acquisition as a compulsory opportunity to acquire technology, because so much of its technological content is either sealed or allocated to partners. There are also nations that cannot afford the F-35; their number will change according to how well the program can stabilize or cut costs.

The second strategic factor is the combination of unit acquisition and operational cost and budgetary pressures. With the apparent exception of the JAS 39 Gripen, where cost reduction has been an enforced requirement, unit acquisition and operational costs have continued to rise in inflation--adjusted terms. Air forces globally have shrunk their fighter fleets. National economic development may support increased defense spending, but it also strains budgets through higher personnel costs.

A third factor, related to budgets, may come into play. Historically, most armed forces have not done well at buying equipment that is affordable to operate, even though (according to a Boeing estimate) 70% of a system’s cost is outside the acquisition budget. Often this is because acquisition and operating budgets are separate: Unlike a business, a government department cannot combine its amortized acquisition and operational costs in a single line-item and balance them out. A more businesslike acquisition plan—probably including more use of performance-based logistics (PBL) contracts rather than the old-style “transactional” approach of buying spare parts as needed—could result in greater efficiency and more focus on operational costs.

These market developments are prompting different responses. Boeing, in media briefings in late June, maintained that the Super Hornet/Growler could remain in production well into the 2020s with both domestic and international opportunities. The fighter is still in contention in Denmark and in some Middle East markets, and the final fiscal 2015 budget is likely to extend EA-18G Growler production for the U.S. Navy. A need for more domestic Super Hornets and Growlers is seen late in the decade, with the Advanced Super Hornet emerging after 2020 as both an upgrade to Navy platforms and a candidate to replace 1980s legacy aircraft as they pass the 40-year age mark.

Boeing stresses cost per flight hour, saying that the Super Hornet, at $17,000 per hour, now has the lowest of any U.S. tactical fighter. Even the latest F-15 is claimed to cost $24,000 per hour, compared with $42,000-45,000 for older F-15C/Ds. One major saving, Boeing says, is the new fly-by-wire flight control system, which cuts FCS maintenance cost by 80%.

The Europeans are upgrading their fighter aircraft and looking for export opportunities (AW&ST July 7, pp. 32-39). One innovation that may prove increasingly important is not technological: Saab’s use of leasing. Since fighter deals often involve very long-term government-backed financing, the step to a lease is not precipitous, and it can be packaged with a PBL. Saab has leased aircraft to the Czech Republic and Hungary; a “lead-in” lease of JAS 39C/Ds was part of the offer to Switzerland, and a similar deal is being discussed with Brazil. Saab is reported to have offered a lease to Malaysia.

There also is renewed interest in third-party upgrades. Israel Aerospace Industries is promoting the Kfir Block 60—1950s design roots and all—as a low-cost fighter with a modern avionics suite. IAI says it does not plan to get involved in F-16 modernization, at least as a prime contractor, but if Singapore decides to open a contest for its upgrade program it is likely to be a three-way battle, with Boeing trying to join BAE Systems as a contender in a potentially large market. 

 

AMERICAS Status Number Candidates Decision Date
Argentina Review 18 Kfir Block 60 2014
Brazil Negotiation 36-100 JAS 39E 2014
Canada Study 65 F-35, Typhoon, Rafale, F/A-18E/F 2014
Chile Study TBD F-16 upgrade, Kfir Block 60 Uncertain
Colombia Study TBD F-16 upgrade Uncertain
Peru Study <20 Typhoon (used), MiG-29 upgrade Uncertain

 

 

EUROPE Status Number Candidates Decision Date
Belgium Competition 30+ F-35, JAS 39E, F/A-18/F Uncertain
Denmark Competition 30 F-35, JAS 39E, F/A-18/F, Typhoon 2015
Finland Study 40+ TBD Uncertain
Greece Competition 100+ F-16 upgrade 2015
Italy Negotiation 45-90 F-35 2014-15
Netherlands Decision 37 F-35 2012
Poland Study 40 TBD TBD
Romania Order 12 F-16A 2014
Slovakia Review 12 JAS 39C Uncertain
Turkey Review TBD F-35, F-16 upgrade 2015
U.K. Review 48+ F-35 2015

 

ASIA-PACIFIC Status Number Candidates Decision Date
Australia Negotiation 58 F-35 2014
India Negotiation 126 Rafale Uncertain
Japan Order 40 F-35 2011
Malaysia Competition 20+ JAS 39, Typhoon, F/A-18, Su-35 2015
Philippines Order 12 F/A-50 2014
Singapore Competition 70+ F-16 upgrade 2015
South Korea Negotiation 40 F-35 2013
South Korea Order 134 F-16 upgrade 2014
Taiwan Order 146 F-16 upgrade 2012

 

MIDDLE EAST Status Number Candidates Decision Date
Bahrain Study TBD Typhoon Uncertain
Oman Order 30 Typhoon, F-16 2012
Qatar Competition 72 Rafale, Typhoon, Super Hornet, Eagle 2014
Saudi Arabia Order 154 F-15A, F-15A upgrade Uncertain
UAE Competition 60 Rafale, Super Hornet Uncertain