Forty years since it first flew, the F-16 fighter is poised to enjoy a new lease on life. Upgrades to the aircraft’s avionics, coupled with structural work to extend flying hours, are set to enter service as customers refresh their jets ahead of the arrival of the F-35. And, following South Korea’s selection of BAE Systems’ upgrade solution in 2012, there is now a choice of upgrade providers for the 28 customers who currently operate a staggering 138 different configurations of the blended-wing aircraft.

The Korea deal “really did change the landscape” for F-16 upgrade programs, says John Bean, a former Lockheed staffer who was appointed as BAE Systems’ Global Fighter Programs business vice president and general manager 15 months ago. Before BAE stood up its F-16 upgrade business, operators looking for upgrades had exclusively dealt with the original manufacturer. The emergence of a rival has given operators options, Bean argues, and he believes that the Korean order is “the first of a lot more to come.”

Speaking here at Farnborough, Bean said he estimates the potential market for F-16 upgrades to be somewhere between 1,000 and 1,300 aircraft over the next 10 years, with a potential total value of around $10 billion. Enhancements are required by customers who wish to prolong the life of their F-16 fleets ahead of the introduction of the F-35, and/or who plan to field their F-16s alongside the Joint Strike Fighter and need upgraded cockpits and other avionics capabilities to facilitate easier interoperation. Bean is confident that BAE will win “a majority” of that business.

Singapore, Greece, Turkey and Chile are known to have plans to upgrade their F-16s in the foreseeable future, while Bean notes that “three or four others” are expressing interest in similar options but have not gone public with this as of yet. Still, the largest single slice of F-16 upgrade work will come from the U.S., so it is perhaps there that the battle between Lockheed and BAE will be at its fiercest.

U.S. F-16 upgrade plans have been in limbo since the cancelation of the CAPES (Combat Avionics Program Extension Suite) project earlier this year. CAPES was a casualty of post-sequestration U.S. Department of Defense budget cuts but, according to Lockheed Martin, significant elements of that program may be rescued in the 2015 budget. Bill McHenry, business development director for F-16 programs at Lockheed, says the company expects to see items funded that will effectively resurrect parts of CAPES for the US F-16 fleet.

The U.S. Air Force “had an operational requirement for an avionics improvement to the F-16, and also for a structural improvement to the airplane,” McHenry said during the Royal International Air Tattoo in Fairford last week. “That operational requirement never went away: It was the budget that went away.”

Lockheed continued with their structural work, which involves “bending and twisting” an F-16 “to evaluate what modifications it needs” to achieve the hoped-for service-life extension from 8,000 hours up to a possible 12,000. Modification and upgrade work for other F-16 customers – notably Taiwan – has seen the company continue aspects of the avionics work that were also part of the CAPES plan.

“The USAF is reconstituting an avionics upgrade program,” McHenry says. “It will not be called CAPES, it will not be as aggressive as CAPES – but they’re reconstituting that program. Our argument is that with Taiwan leading the way in developing this system, that a CAPES-lite – those are my words – or some other alternative, would be a very logical, low-cost, high-benefit option for the USAF to look at.

“The 2015 budget has allocated money and a plan for reconstituting some avionics upgrades while maintaining the structural upgrade,” McHenry continued. “In the 2015 budget that’s being developed right now, you will see the SLEP [Service Life Extension Program] in there, you will see the mission computer and the high-speed data bus that’s required for the AESA, and you will see [enhanced] cockpit displays.”

BAE’s view sees U.S. upgrade work proceeding, but perhaps not just yet.

“I don’t know that CAPES will come back next year,” Bean says. “I know there’s push to bring some funding – but probably the year after that would be more likely in my expectation. But whenever the U.S. government wants to upgrade its F-16s – and it’s got a fair number of them, both in the active Air Force and the Air National Guard – we’re certainly going to make ourselves available to provide a competitive alternative.”