Andrew Doyle/MUNICH
In mid-May, the Czech Republic invited proposals from Western aircraft manufacturers for up to 36 advanced fighters. A few weeks earlier, the Polish Government revealed it would invite tenders for 42 such aircraft. While signalling the start of a major sales battle between the USA and Europe's most powerful defence companies, the announcements also mark a new phase of a contest that has effectively been under way for several years.
So crucial is the east European market to the export potential of several Western fighter types that manufacturers have spent millions of dollars preparing the groundwork for their bids. Boeing, for example, has bought a 35% stake in Czech manufacturer Aero Vodochody, while British Aerospace has placed contracts with Polish industry to supply parts for its Hawk trainer.
In addition to the Polish and Czech fighter requirements, Hungary is also looking for new front-line aircraft, while Slovakia recently joined the fray with proposals to take up to 60 trainers and light attack aircraft. Poland, Hungary and the Czech Republic recently joined NATO, and need to bring their defence capabilities into line with those of the West.
Between them, these three countries are likely to require around 100 new front line fighters by 2010, with the potential for even greater numbers in the longer term. It is a high stakes battle as it is expected that they will favour buying a common aircraft type to minimise technical support and training costs across the region.
Fighter face-off
The contenders are the Lockheed Martin F-16, Boeing F/A-18, Saab/BAe Gripen and Dassault Mirage 2000. The Eurofighter Typhoon is thought to be too expensive for the three countries, although the Czechs have included the type in their request for information.
The F/A-18 is a strong contender, say industry sources, because of its operational performance. The F-16 is cheaper to acquire and operate. The US manufacturers see Saab/BAe as their main competitor, and the Gripen has been particularly well received in Hungary. The Swedish type's only export success s0 far has been in South Africa.
A potentially important factor is Poland's plan to take 18 fighters on a five-year interim lease from 2001, before its new fighters are delivered in 2006. Second hand F-16s orF/A-18s could be sourced from the surplus inventories of the US Air Force or Navy, respectively, while BAe has looked at providing used Saab Viggens from the Swedish air force.
One problem facing the US manufacturers is the pressure being applied on countries such as Poland to go for a "European solution", by picking Saab/BAe or Dassault. This pressure is coming from nations such as Germany.
This has led Lockheed Martin to consider sourcing used F-16s for Poland from the Belgian and Dutch air forces, which have significant numbers of aircraft in storage. This could then be paraded as a quasi-European deal because Belgium and the Netherlands would receive the lease revenues, while Lockheed Martin would provide technical support.
The Polish Government will also be looking for heavy offset and extensive participation for the country's struggling aerospace industry as part of a deal. It has already stated that the fighter competition will be "closely linked" to its plans to privatise Polish aerospace companies.
Industry sources say that, if Lockheed or Boeing are successful in the region on the military side, then LOT Polish Airlines, Czech flag carrier CSA and Malev of Hungary will be under pressure to buy Airbus aircraft for their fleet renewals. This would enable Poland, Hungary and the Czech Republic to maintain their European credentials while continuing to build ties with the USA on military equipment.
Hungary seeks to take up to 50 Western multirole fighters, but does not expect to make a selection before 2003. But it has decided to contract DaimlerChrysler Aerospace to upgrade some of its MiG-29s with Western avionics, and Poland is considering doing the same.
Light attack/trainers
Meanwhile, the Czech Republic has committed to taking 72 indigenously-developed Aero L-159s for the light attack role, and the Czech aircraft builder hopes to sell the type to Poland and Slovakia. It will face stiff competition from British Aerospace, with the Hawk.
If Aero Vodochody succeeds in Slovakia, a Hawk sale could prove difficult for BAe in Poland, especially given the Czech Republic's offer of L-159 licensed production to its neighbour. The Czechs are trying to boost export sales of their aircraft by reviving the so-called Visegrad agreement, which would promote co-operation between itself, Poland, Hungary and Slovakia.
Also competing for the Slovakian requirement will be the Aermacchi MB339 and the Yakovlev Yak-130. The latter could win as it is powered by the Slovakian-built DV-2 engine. AlliedSignal, which builds the L-159's F124 turbofan, and Rolls-Royce, responsible for the Hawk's Adour, are separately courting DV-2 manufacturer Povajske Stroyarny with workshare offers. They aim to ensure that Povajske gets a sufficient share of engine work to make a Hawk or L-159 selection politically acceptable.
BAe plans to offer a combination of Hawk 100 two-seat trainers and Hawk 200 light attack aircraft to Slovakia. The country, which does not plan to acquire advanced fighters, aims to make a selection by the end of the year.
Eastern Europe also presents major opportunities on the rotary wing front, with attack helicopter purchases and upgrades in the offing. Poland wants to purchase up to 50 narrowbody attack helicopters and intends to make its selection by the end of this year.
In the running for the Polish requirement are the Agusta Mangusta, Bell AH-1W/Z Super Cobra, Boeing AH-64 Apache, Eurocopter Tiger and, probably, the Denel Rooivalk. Efforts are under way to involve Polish industry in these programmes, with Bell in particular showing an interest in investing in PZL-Swidnik.
Poland will also upgrade 50 PZL-Swidnik W-3 Sokol helicopters with new rotors, more powerful engines, extra fuel tanks and additional armaments. This follows the country's decision to scrap the Huzar attack helicopter programme, which would have equipped W-3s with Israeli avionics supplied by Elbit.
The Czech air force wants to upgrade its 36 Mil Mi-24 Hind attack helicopters from 2002-3, with night vision and expanded weapon system capabilities, although no funding has yet been earmarked for this.
Slovakia is also eyeing an upgrade for 35 of its Mi-24s, covering a new weapons management system, autopilot, forward-looking infrared sensor and navigation and communications systems, plus anti-tank armaments and main rotor enhancements. US, French and Israeli upgrade specialists are expected to be invited to bid for the work later this year. Hungary has stated that it will need to replace some of its 32 Hinds - of which only 12 are operational - by 2005.
Other items on Eastern European shopping lists include transport and VIP aircraft. Poland has a pressing need for 12 medium transport aircraft to replace its Antonov An-26s, and is evaluating the Alenia G222, CASA CN-235 and Lockheed Martin C-27J(an upgraded version of the G222)and C-130J. The Polish air force believes this order will be placed soon because funding is included in the government's budget.
Up to eight VIP aircraft are also required by Poland: six business jets and a pair of airliners in a corporate configuration. For the former competition the Bombardier Global Express, Gulfstream V, Dassault Falcon, Israel Aircraft Industries' Galaxy and Raytheon Hawker 1000 are being offered. The larger type is needed to take over from a pair of VIP Tupolev Tu-154s, and the choice is between the Airbus A319CJ and the 737-700-based Boeing Business Jet.
The procurement decisions taken by these four east European countries will have far-reaching implications for Western manufacturers, which seek to establish their products in new export markets. Most of the profits for the successful bidders will come from providing technical support over the aircraft's life, rather than in the initial sales. Industrial offset of at least 100% against each purchase will be a standard requirement, and Poland has already stated that its payments will have to be spread over many years. It has earmarked $3 billion to pay for new fighters between now and 2010.
Those companies that are considering buying into local industry (or who already have done) are doing so primarily to boost their chances of winning the major procurement contracts. These companies have little or no value in their own right to Western defence contractors, say industry sources in the region.
The long-awaited Eastern European re-equipment process may be about to get under way, but it remains unclear when the window shopping will end and the buying will begin.
Source: Flight International
