Executives from ’s defense unit say they expect to have a productive air show this week in Paris despite a smaller turnout than usual from the in terms of personnel and hardware dedicated toward international sales campaigns.
By contrast, says Jeff Kohler, vice president of business development for, more Pentagon support in those areas would be critical for the company’s plans for the upcoming Dubai and Singapore air shows.
“If I had my choice, I’d rather focus on Dubai and Singapore,” Kohler told reporters June 16 at a roundtable in advance of the Paris air show opening.
The Pentagon opted to reduce its presence at this year’s air show in light of deep budget cuts handed down in the latter half of fiscal 2013 from Congress. The Defense Department also declined to bring its normal arsenal of hardware to show for would-be international buyers. There is no, no , no , and no in the so-called “DOD corral,” and the anticipated military star of the show is Russia’s Su-35, which has qualified for a dazzling flight display here this week.
The reduced presence “doesn’t affect our ability to sell,” Kohler says, noting he has full days of sales meetings at the show.
“Their involvement with us in terms of international [foreign military sales] is probably at an all time high despite not being at a trade show,” Kohler says. The drawback, he says, is that the U.S. hardware is not on display during public days; this is often a tool used to gain support from local populations. The public show days are even more important in areas of the Middle East and Asia, he says, where the company is pushing its products hard in various campaigns.
Of particular interest to Boeing is showcasing its F/A-18E/F, which is competing in campaigns globally, and thetiltrotor. Defense Secretary Chuck Hagel recently announced a forthcoming sale of V-22s to Israel. Though details are scant now, one defense official said the first batch would probably be of six MV-22s with another to follow after.
The aircraft will likely come off theproduction line for delivery to Israel.
The Pentagon just signed a five-year multi-year buy with the team for the next 99 aircraft (92 MV-22s and seven CV-22s for the Air Force). The U.S.is not interested in providing its older airframes to the ally, and the first six could be drawn from the production line easily without interrupting the Marine Corps’ ability to conduct its operations, a defense official says.
The Marine Corps is now beginning to plan for training Israeli crews and maintainers.
Meanwhile, Brazil has requested that bidders in its fighter competition extend the validity of their bids to September. Boeing’s F/A-18 E/F Super Hornet, theand are vying for the buy of 36 fighters, and have been since 2008.
The company is looking to sell the smallunmanned air system (UAS) to Brazil. The capability is being considered as the nation nears its duties hosting the World Cup and the Olympics. The small UAS, developed for supporting commercial fisherman, could be used to monitor activities in support of these events, Kohler said.
Additionally, Boeing has begun — with the help of the U.S. Air Force — to provide technical briefings to foreign customers interested in buying theaerial refueler being developed by the company as a KC-135 replacement. Kohler said near-term interest from customers, whom he declined to name, totals about 20 of the -based refuelers.
The company is on contract with the U.S. Air Force to develop the tanker and deliver the first 18 by the fall of 2017. Chris Raymond, vice president of business development and strategy for Boeing Defense, Space and Security, said Boeing’s contribution to the development cost of the KC-46 is in line with that estimated by the(GAO). These government auditors estimate the company will have to add about $400 million to the Air Force’s $4.9 billion contract to meet the aggressive schedule. Boeing is adding to the Pentagon’s contract value because the company bid an usually low price to beat rival , which was offering an -based tanker as an alternative, and the contract is fixed-price.
Early in development, Boeing burned through management reserve more quickly than the Air Force expected for the KC-46 because the company implemented aggressive risk-management measures, such as building extra system integration laboratories. Raymond says these management reserve accounts are now “very healthy” after, which is providing the 767-200ER platform, implemented cost-reduction measures.
The company also sees a potential market for another 10-30 foreign sales of the large C-17 tactical airlifter. Orders to date carry the company’s Long Beach, Calif., production line through 2014, Raymond says.