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FIGHTERS: A 130 BILLIONN DOLLAR MARKET TO 2008

In recent years fighter manufacturers were not exactly in an enviable position. They had to come to terms with shrinking defence budgets in Europe, heavily reduced orders from the US military, financial crisis in Asia and other parts of the world, even far fewer contracts from the Middle East and almost a complete production stop in Russia. At the low point in 1995 all these factors caused turnover and deliveries to be reduced to a third of the levels experienced in the eighties.

Dassault Mirage 2000-5

However, not only the slump affecting current production programmes caused heavy headaches for some companies. Especially in Europe those models which were still in development had to weather very turbulent times. They quite often had to fight for their survival. Continuous political discussion about the necessity of fighters after the end of the Cold War and a tremendous cut in defence budgets led in some cases to lengthy delays of the work that had been undertaken. Almost everywhere there was a hefty reduction in the number of units to be pricured eventually.

In the last one or two years the downward trend has stopped, and many programs have a firm basis again. This change in direction is especially noticeable with the Eurofighter, which has overcome the deep crisis of the past and is in a brilliant position with 148 firm orders now.

It has to be said that here, just as with Rafale or F-22, there will be some delay before the contracts will have an effect on the workfloor. The US market research company Teal Group therefore predicts another dip in turnover and delivery numbers between 1999 and 2001, before things will steadily pick up again. Sales are said to rise from $9.8bn this year to $16.5bn in 2008. In the next ten years Teal sees prospects for 2,732 fighters with a value of $129.1bn. By comparison 5,035 fighters were sold in the last ten years for $172.4bn.

Despite the drop, this still is a sizeable market, which needs to be served. Unlike previous previous times Teal foresees good chances for European manufacturers. Eurofighter is said to be the most promising program with more than $25bn as far as turnover is concerned. As well as the requirement in the home countries there are also interesting openings for export. Since Lockheed Martin's F-16 is getting a bit "long in the tooth" and the F-18E/F is beyond many countries' means, the "Typhoon" will not have much competition to contend with until 2010.

France's Dassault might also profit because of this new situation with their Rafale. However, the company now has to pay for leaving the European co-operation in the 80's. This aircraft is comparatively expensive, because only few units are needed for the French market. The Saab Gripen is, on the other hand, interesting for smaller countries only, although it is a very versatile and easy to maintain aircraft.

Prospects for the Russian Industry are difficult to judge. New developments have come to a virtual standstill, because of the country's wretched financial situation. Mikojan is therefore limited to market improved MiG-29 versions, while Suchoi can at least offer a variety of fighters based on the still impressive Su-27 "Flanker". Surprisingly Teal's analysts predict the need for over 400 units of the Su-27, Su-30, Su-34 and Su-35. This would make it one of the most frequently built fighter over the next decade. It remains to be seen howether, it this figures materialise as customers are wary of support and spares part availability.

Export efforts are also hindered on the other side of the Atlantic. Authorisation procedures are getting stricter and depend on unforeseeable political events. What is more, extremely restrictive practises for the transfer of technology (e.g. access to software), are annoying more and more customers. Despite this the Teal Group predicts good sales prospects for the Lockheed Martin F-16, the main reason being that the price of the fighter from Fort Worth is unbeatable.

While Lockheed is working on the F-16 and the F-22 Raptor, things are looking glum for Boeing's Military Aircraft Department in St. Lois. The F-15 Eagle and F-18C/D Hornet production runs will soon be finished, which only leaves the Super Hornet for the US Navy.

Under these circumstances the JSF competition is of the utmost importance for both US firms. If the Pentagon does not change its mind and orders both models, the competition winner will have the monopoly for fighter production in the USA from 2015.

Demonstrator aircraft are being built at the moment, and after the offers have been checked, a decision will be made in 2001. The production of about 3,000 fighters for the US Air Force, US Navy and the Marine Corps alone is at stake. There is also a considerable potential for export, which will become noticeable from 2010 at the earliest.

From page 57 of FLUG REVUE 6/99