With worldwide fighter production set to hit an all-time low in the first years of the new century - fewer than 140 aircraft from all US and European manufacturers combined, according to analyst Merrill Lynch - there is everything to play for in the export market.
Denied the economies of scale of the once-huge US domestic fighter market, US manufacturers such as Boeing, Lockheed Martin and McDonnell Douglas depend increasingly on export sales - and are exposed to the vagaries of competition in the international fighter marketplace.
Compared with the 5,000-plus F-4s built by McDonnell Douglas and the 4,000-plus F-16s sold so far by Lockheed Martin, the 620 aircraft ordered by the four Eurofighter partner nations seems relatively modest.
But compared with the 548 Boeing F/A-18E/Fs planned for the US Navy and the 339 Lockheed Martin/Boeing F-22s programmed for the USAir Force, the Eurofighter programme is off to a good start.
Eurofighter production is scheduled to reach 52 aircraft a year by 2004 - albeit from assembly lines in four locations - which eclipses the 24 F-22s and 36 F/A-18E/Fs planned for production each year in the same period. This appears to give the European consortium a fighting chance in an export market dominated until now by US fighter manufacturers.
But that same market has not been equally kind to every manufacturer. Economic downturns have delayed fighter procurements from Asia, Latin America and Eastern Europe, increasing the likelihood of gaps in production lines and giving new programmes more time to establish themselves.
Recognising that the F/A-18E/F and F-22 will not be factors in the export market much before 2005, Boeing and Lockheed Martin are focusing on keeping their current fighter programmes alive. That has brought them into direct competition with not only France's Dassault, but also Saab/British Aerospace with the Gripen and now the Eurofighter.
Recent competitions have highlighted the issue of exportability, and fighter manufacturers' vulnerability to the actions of their governments. Chile was cleared to receive offers of Boeing F/A-18s and Lockheed Martin F-16s only after sustained lobbying by the manufacturers persuaded the US Government to lift its blanket ban on the sale of advanced weaponry to Latin America. Then economic difficulties forced the Chileans to defer a decision indefinitely.
The sale of Gripens to South Africa was first blocked by the US Government because of the former apartheid regime's sanction-busting and the Swedish fighter's US content. The ban was lifted, but not soon enough for US manufacturers to enter the competition, giving the Gripen its first export success.
When Greece was in the final throes of selecting a new fighter in early February, according to the Washington Post, the US Government imposed an unpublicised ban on arms sales to its NATO ally following allegations that it had passed "secret codes" to Russia in return for a system capable of jamming rival Turkey's communications. No evidence of such a transfer was found, said the Post, and any connection between the US action and Greece's decision in favour of Eurofighter is speculation.
News that the United Arab Emirates (UAE) is again evaluating the Dassault Rafale while protracted negotiations continue over its planned order for Block 60 F-16s illustrates the dilemma facing US companies. While accepting that the US Government has an obligation to control technology transfer "in the national interest", US aerospace manufacturers want the processing of export licences simplified and speeded up, to prevent sales being lost to foreign competitors.
Neither government nor industry will comment specifically on the UAE deal, but the delay in signing a contract - expected before the end of last year, but now hoped for by mid-year - is known to result from difficult negotiations over the UAE's demand for access to the software source code in the Block 60 F-16's active array radar and electronic warfare system, development of which would be funded by the UAE.
Industry concerns are less about the substance of the negotiations than their progress. Delays in signing a contract have already pushed back first deliveries to the UAE from 2002 to mid-2003, and have opened a gap in F-16 production. The last aircraft currently on firm order is scheduled for delivery in 2001 - to the USAir Force. The first 10 of up to 50 further F-16s planned for the USAF will not be delivered before 2002.
Boeing faces similar concerns with the F-15E line which, based on current orders, is scheduled to shut down in 2002, and the F/A-18C/D line, which is due to close in 2000. There are opportunities for new and follow-on F-15, F-16 and F/A-18 orders, and the manufacturers are pushing for the US export control system to be streamlined to avoid losing any near-term sales because of bureaucratic delays.
The push is being led by the Aerospace Industries Association (AIA), which has made modernising the US export control system one of its "top 10" issues for 1999. Joel Johnson, vice-president, international, says the AIA is pursuing several avenues, including:
· lobbying Congress to provide more resources to the government departments responsible for licensing exports;
· urging a "scrubbing" of the munitions list, which details the technologies that must be licensed before they can be exported;
· proposing various ways to streamline the licensing process, including self-policing, programme licences and licence-free zones;
· working towards a new export control act that would recognise the realities of the global marketplace in the 21st century.
Realistically, the AIA does not expect new export control legislation within the remaining two years of the current administration. Instead, the trade body is focusing efforts on finding extra resources and streamlining processes.
The AIA says the US Federal Aviation Administration allows manufacturers to "self-certificate" aircraft by delegating authority to designated engineering representatives who are employed by the company, but are answerable to the FAA. The AIA proposes something similar for export control, says Johnson.
The trade body would also like to see more programme licences. "It took 47 licences to sell the F-18 to Finland," says Johnson. "Once the government made the foreign policy decision to sell F-18s to Finland, it did not need another licence for every piece of the aircraft." The AIA would also like to see the need to renew licences removed. "After we've sold F-16s to the Netherlands, why should we need another licence?" says Johnson.
Another proposal is licence-free zones. "About 50% of licences are applied for by 12 countries," says Johnson, "and 70%, by value, of export licences are for fewer than 20 countries." The AIA believes it should be possible to exempt certain countries or regions, or certain companies' products, from the need for export licences. "The F-15 is only operated by Japan,Saudi Arabia, Israel and the USA. Should we be controlling every spare part? The F-4, on the other hand, is operated by Iran, so those spares should be controlled."
Licence problemsJohnson acknowledges that licence-free zones are problematic, citing the example of the F-16. Sales of this aircraft and its spares to Pakistan have been banned because of that country's nuclear weapons programme. "Perhaps it would be possible to grant one licence for all European operators," says Johnson.
Another proposal with more direct relevance to the European rivals of US fighter manufacturers is one to allow contractors to initiate the process leading to the release of technical data to potential customers. At present, a foreign government must request information on a fighter before data can be released. This leaves manufacturers with the task of trying to stimulate sufficient interest in their product using only publicly available data.
"It's a chicken and egg situation," says Johnson. "How do you tell a country what they should be asking for?" The AIA proposes that approval be granted for several countries at a time. "Perhaps it could be done for, say, 25 countries at once, with a sliding timescale and an opportunity to revisit each one," he says.
Release of advanced weaponry such as the AIM-120 AMRAAM medium-range missile has been a stumbling block for US fighter manufacturers, because of fears over disturbing the military balance in a region.
"AMRAAM is a very difficult issue," says Johnson, but he points to the solution reached with Thailand before it cancelled its order for F/A-18s. The aircraft were to be wired for AMRAAM and the Thais were to be provided with a simulator enabling them to train with the weapon, but the missile would not have been delivered until the Russian equivalent, theAA-12, had entered service in the region.
European fighter manufacturers also have concerns about export releasability. Dassault has long been thought of as having the greatest freedom of action, able to offer complete aircraft and weapon packages with few, if any, political strings attached, but it is hampered by low production rates that push up costs of its fighters. The Mirage 2000 will be produced at a rate of only 10 a year, says Merrill Lynch, and Rafale production will reach 15 a year by 2005.
By comparison, the Gripen is scheduled to be produced at the relatively respectable rate - by today's diminished standards - of 30 a year, says Merrill Lynch. The Swedish fighter, however, is subject to the same export controls as the F-16 and F/A-18 because of its high US content, principally the engine.
The Eurofighter Typhoon's US content is relatively minor, says the consortium, avoiding the possibility of a USsales veto. The four partner nations will have to approve any export sale, but have signed a memorandum of understanding which says, in effect, that no one nation can block the sale of the aircraft or the transfer of technology.
Given changes in the German and UK Governments that could bring shifts in policy on arms sales, that agreement could provevital to Eurofighter in future export battles with US manufacturers.
Source: Flight International
