Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow,...

136
Report for Dutch Parliament Sep-2009 Market Analsysis JSF Jobo © JSF51 V3.00 Page 1 of 136 Market analysis JSF How many JSF’s will be produced? JOBO Report prepared for members of Dutch Parliament September 2009 JOBO-2009-JSF51 V3.00 revised/extended/English Author Johan Boeder ©

Transcript of Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow,...

Page 1: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 1 of 136

Market analysis JSF

How many JSF’s will be produced?

JOBO Report prepared for members of

Dutch Parliament September 2009 JOBO-2009-JSF51 V3.00 revised/extended/English Author Johan Boeder ©

Page 2: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 2 of 136

Introduction : 4.500 to 6.000 JSF’s a fata morgana “People only see what they are prepared to see.” ~ Ralph Waldo Emerson (1803-1882)

How many Lockheed Martin F-35 Joint Strike Fighters will be manufactured? Optimistic marketing figures are telling us that market opportunities of 5.000 – 6.000 F-35’s are possible. The Dutch government structurally uses a number of 4.500 JSF’s in their JSF Business Case calculations. These optimistic numbers are widely used amongst governmental and industrial organisations in several JSF Partner countries. However, when these parameter (4.500-6.000 JSF’s) wrong, the foundation of a lot a calculations, expectations, nice promises, non-binding contracts and investment decisions is wrong. This parameter is the foundation of the Dutch JSF Business Case [#51.1], the Dutch participation in the JSF development stage (SDD) and one of the foundations of the Dutch project “Maintenance Valley Brabant”. Similar decisions and projects in other countries are also based on the same expectation: “4.500 to 6.000 JSF’s will be manufactured”. But it is not only an important question whether the calculation of one of the most important parameters in the JSF Business Case discussion since 2001 is right. All calculations about procurement price, maintenance cost, cost of later upgrades are highly influenced by this parameter. There is a strong relationship between production cost and production quantities [#51.2]. In this report it will be made clear that this essential parameter is marketing hype only, a fata morgana. Already in 2001 the projections of the fighter market were too optimistic and since the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations of Lockheed Martin are still the same. This report is based on a document, dated August 30, 2008, “titled “Analyse Business Case parameter 4500 JSF’s” [#51.3], I prepared for several Dutch Members of Parliament. A more detailed extension of that document I used and defended in the Dutch Parliament Hearing of the Standing Committee of Defense in April 2009. After questions about some details, I decided to add more detailed background information to this document and to translate it into English. This new version is offered by me to the Standing Committee of Defense. the Standing Committee of Economical Affairs and the Standing Committee of Finance of the Dutch Parliament. This report is written in a time of dynamic developments in the World Fighter Market. Changes in this market may occur from month to month. Any requests for clarification or suggestions for improvement should be addressed to the author Johan Boeder, The Netherlands, mail [email protected] Kesteren, The Netherlands September 30, 2009

Page 3: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 3 of 136

Management summary and main conclusions Focus of this report This report shows that the early JSF Program Office and Lockheed Martin expectations about the JSF market opportunities were over-optimistic prior to essential JSF participation decisions in 2002. This optimistic expectations haven’t changed since 2002 in a rapidly changing world. The report will give the readers a clear and complete detailed overview of the world potential for JSF fighters. The key reasons that will cause up to 50% lower numbers are analysed for each of the potential countries with a main focus on the situation of the leading buyer, the USA. This will have implications for industrial investment and supply chain planning and for calculations of employment rates. The report will show political en industrial decision makers that the JSF business case is based on the fundamental weak parameter of incorrect expectations of high production quantities. An uncertainty that influences economical benefits, procurement price and life cycle cost of the JSF. Optimistic view prior to 2002 decisions In 2002 the decision in The Netherlands and in several JSF partner countries to participate in the Joint Stike Fighter development was an “industrial project”. It would be a unique project, based on “best price and best value” and not on the more certain “industrial offset” model. The main reason the Dutch government and parliament decided to participate was that high industrial orders were promised for a minimum of 4.500 aircraft with opportunities promised by Lockheed Martin to a maximum of 6.000 aircraft. In The Netherlands the calculation of the Business Case was based on the possibility to pay in US$ 800 million in SDD stage, pre-financed by Government and to be paid back with royalty charges of real sold aircraft. In other countries the situation was more or less the same, sometimes with different calculation models, but all with the same market analysis. Details of these “marketing analysis” were not public and not available for national parliaments for “commercial reasons”. Decision to participate were not based on real and verifiable market analysis. I found that already in 2002 the quantity of 4500 to 6000 was far from realistic. Only with a 90% market share in markets available for the US industry and without shrinking defense budgets these numbers would be possible. Since 2002 the order intake (fixed orders) of the industry of several JSF partner countries shows clearly that the promises can not be kept, it is reflected in a downward adjustment of numbers in press bulletins of the industry from 2002 through 2008. The reality of 2002 is not the reality of 2009 Now, in 2009, based on current market data we may investigate the reality of the industrial possibilities in the JSF project. But governments, parliaments, industry and taxpayers in The Netherlands, Norway, Denmark, Australia and Canada are still believing that there will be a possibility to sell 4.500 to 6.000 F-35 Joint Strike Fighters. And industial and political leaders are basing their decisions on the uncritical use of these numbers. Several countries have defense budget constraints. There is an over four year delay in development and start of full production of the F-35. The F-35 is not as affordable as promised, with a 40% increase of the unit price and estimated life cycle cost doubled since 2001. The F-35 is a post-Cold War concept, but the (hybrid) warfare in Iraq and Afghanistan show other operational needs. And a changing balance of power by a fast developing Asian continent with an own defense industry will change the high-end requirements of the Forces. Also, the reality of fighter replacements during the 1990-2009 period show that retirement of

Page 4: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 4 of 136

old 3rd and 4th generation jet fighters doesn’t mean replacement, the total fighter market is becoming smaller. All these factors are influencing marketing campaigns and opportunities in several countries. Summary of quantities per market The detailed quantitative analysis in this report shows that a “likely estimate” of about 2.500 aircraft, including 450 foreign sales aircraft (outside the JSF partner countries) is a more realistic one. In each case the now widely used, commercial driven, expectation of a production of 5.000 – 6.000 aircraft has to be divided by a factor 2. The key reasons that will cause up to 50% lower numbers are analysed for each of the potential countries with a main focus on the situation of the leading buyer, the USA. Details can be found in the referenced paragraphs. Continent by continent and country by country, all 166 countries in the world, the market opportunities and quantities are analysed, based on current fleet, planned replacements until 2030, budget and available competitors. Table 51.1 “JSF World Market 2008-2034”

Source: prepared by JOBO Situational and factual analysis The analysis of possible JSF opportunities and production quantities offered in this report was based on the reality of the World market of fighter jets. In spite of other publications about lower market expectations the JSF Program Office, Lockheed Martin and numerous

Page 5: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 5 of 136

governmental institutions are refusing to update their official market expectations. They are still using numbers between 4.500 and 6.000 without a solid foundation. . What will cause lower F-35 numbers within the US Fo rces The US Forces are the most important contributor to the F-35 Program, paying most of the development costs and procuring far the most F-35A’s. Without the USA the development of the F-35B and F-35C not even would happen. Therefore this report focuses in detail on what will cause lower numbers of F-35’s to be procured by the USA. Not only general budget constraints of the US Government and the Department of Defense will influence the funding. Within the F-35 Program there are several influences also, the delay of over four years in the development stage and the long, near 20 year, period between start of the program Start 1996 and start of full scale production in 2016 will turn the F-35 into a partly obsolete post-Cold War concept before becoming operational. Operational alternatives are necessary and available, or being developed, like Unmanned Vehicles, the OA-X counter-insurgency concept, new needs for medium range aircraft, future need of 6th generation aircraft in the late 2020s. In short term the fighter gap will lead to closed squadrons, an irreversible process, and to smaller squadrons. The delays in production as a result of delays in development and testing have resulted in lower quantities, may lead to missed or missing market opportunities in several countries. The cost growth of 38% and the doubled life cycle cost since 2001 makes the F-35 less affordable than predicted. All these factors are interacting with each other, as a deadly embracing. Lower quantities mean loss of economy of scale, that will bring higher prices, the start of a downward spiral in the F-35 program. Many of these factors are not only valid in the USA, but are valid also in several JSF Partner countries with the same effects. Table 51.2 “US Budget as Independent Variable”

Source: prepared by JOBO based on US DoD and public d ata

Page 6: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 6 of 136

Signals of decreasing F-35 quantities within the US Forces In mean time in the USA we have clear signals within the US Forces of descreasing F-35 quantities. The first cut was in 1997, when 126 aircraft were scrapped from the total. The next QDR, in 2002, again 409 aircraft were scrapped. New attempts to cut in the US JSF numbers in 2005 were avoided officially, the real reason not to frustrate the cooperation with the JSF development partner countries. The shift in early 2007 to a far future (2028-2034) of hundreds of F-35’s can be considered as a new sign in the funding problems the program has within the USA. The official requirement in the documents is not the same as funding possibilities. Not even the downsized number of 110 F-35’s per year can be paid from the DoD’s budget. In comparison with the original planning in 2002 a total of 660 units are scrapped in the first series of low rate initial production: the most clear sign of delay and missed industrial and commercial opportunities. Also, the last three years there is further downsizing of the numbers to be procured. Latest signs are new CSBA reports, written by advisors with close relationship with the Obama-administration, advicing much lower numbers. Industrial orders much lower The logical consequence of the lower market expectations will be that the economical benefits and the amount of industrial orders will be much lower. For exemple, in the Dutch situation the original promise of Lockheed Martin was “possible orders of US$ 8 billion (€ 8 billion in 2001 currency)”, based on 6.000 aircraft. When the market is 3.000 aircraft, it means 50% the orders, or US$ 4 billion, or € 2,75 billion in 2009 currency. This is less than 35% of the original amount, expected in 2001. This will have implications for industrial investment and supply chain planning and for calculations of employment rates. Other JSF partner countries will experience the same. Lower quantity means higher procurement prices Lower production quantities will cause less economy of scale with a deadly embracing price-quantity spiral with much higher procurement prices and further decreasing market opportunities. It will effect the possibilties within the defense budget of the involved countries. Lower quantities will influence exploitation costs Lower production quantities will not only cause higher procurement prices, but also more expensive later upgrades and higher exploitation cost with important effect on long term defense budgets. A separate report about the decreasing affordability of the F-35, “Exploitation cost JSF, more than doubled since 2002 ”, April 2009, 44 pages, for the Dutch Parliament, Standing Committee of Defence is also available. (mail author; [email protected]). - End of Management Summary -

Page 7: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 7 of 136

5.1 Table of Contents Introduction: 4.500 to 6.000 JSF’s a fata morgana 2 Management summary and main conclusions 3 Table of contents 7 5.1.1 Optimistic view prior to 2002 SDD participation decisions 10 5.1.2 Public market analysis missing in 2002 11 5.1.3 Used market expectation by JSF Program Office in 2002 12 5.1.3.1 USA prognose 2001 12 5.1.3.2 Other JSF partner countries prognose 2001 12 5.1.3.3 Other export countries prognose 2001 12 5.1.3.4 The “JPO likely estimate” 13 5.1.3.5 The “JPO high estimate” 13 5.1.4 Downward adjustment of numbers in JSF press bulletins 14 5.1.5 Need of an updated marketanalysis in 2009 15

5.1.5.1 Uncritical use of wrong number of 4500 JSF’s 15 5.1.5.2 Reality of 2002 is not the reality of 2009 and beyond 15 5.1.5.3 Retirement is not Replacement 16 5.1.5.4 World fighter fleet replacements 2008-2034 16

5.1.6 Detail analysis of the changing US F-35 Procurement 18 5.1.6.1 Quantities F-35s of the US Air Force 18 5.1.6.2 Quantities F-35s of the US Marine Corps 19 5.1.6.3 Quantities F-35s of the US Navy 20 5.1.6.4 What will cause lower F-35 numbers within the US Forces 22 5.1.6.4.1 General budget constraints 22 5.1.6.4.2 Delays in development 22 5.1.6.4.3 F-35 as post-Cold War concept obsolete 23 5.1.6.4.4 Delays in production 23 5.1.6.4.5 Cost growth and “Budget as Independent Variable” 25 5.1.6.4.6 Program Unit Cost growth of 38% since 2001 26 5.1.6.4.7 Further cost growth may be expected 27 5.1.6.4.8 Current budget insufficient 27 5.1.6.4.9 Lower (world wide) quantities mean further cost growth 28 5.1.6.4.10 Deadly embracing between lower quantities and higher price 29 5.1.6.4.11 Fighter gap: alternatives found in short term 29 5.1.6.4.12 Fighter gap will lead to closed squadrons 29 5.1.6.4.13 Fighter gap and budget constraints lead to smaller squadrons 30 5.1.6.4.14 Growth of Unmanned (Combat) Aerial Vehicles 30

5.1.6.4.15 Changing operational needs: new light attack/observ. OA-X 31 5.1.6.4.16 Changing operational needs: new 4.5 gen fighters 32 5.1.6.4.17 Operationeel need for more and new medium range capacity 33 5.1.6.4.18 F-35 cost per flight hour expectation doubled since 2002 33

5.1.6.5 Signals of decreasing F-35 quantities for the US Forces 35 5.1.6.5.1 First cut, QDR 1997: 126 aircraft deleted 35 5.1.6.5.2 Second cut, QDR 2002: 409 aircraft deleted 35 5.1.6.5.3 Attempt to new cuts, ACC 2004 and QDR 2005 35 5.1.6.5.4 Shift of 515 aircraft to FY2028-FY2035; in 2007 35

5.1.6.5.5 Planned procurement until FY2013: minus 660 aircraft 36 5.1.6.5.6 Continuous, recent, downsizing 2007-2009 200 a/c deleted 36 5.1.6.5.7 More F/A-18 Super Hornets means less F-35C budget 37 5.1.6.5.8 Budget problems, the “110 per year” question 37 5.1.6.5.9 Failing attempts to establish a consortium buy 38 5.1.6.5.10 The JSF engine debate signal of lower quantities 39 5.1.6.5.11 CSBA August 2009 “F-35 may be flying into budget storm” 39

Page 8: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 8 of 136

5.1.6.5.12 Scaling back Italian FACO signal 39 5.1.6.5.13 Advisor Chief of Staff USAF: “reduce F-35A’s by 50%” 40

5.1.7 Jet fighter requirenents of current JSF partner countries 41 5.1.7.0 Overview 41

5.1.7.1 Australia 41 5.1.7.2 Canada 43 5.1.7.3 Denmark 44 5.1.7.4 Italy 45 5.1.7.5 The Netherlands 48 5.1.7.6 Norway 50 5.1.7.7 Turkey 51 5.1.7.8 United Kingdom 52 5.1.8 Jet fighter requirements of European airforces 56 5.1.8.0 Introduction 56 5.1.8.1 Albania 56

- - - - - <all European countries> 5.1.8.42 United Kingdom 72

5.1.9 Jet fighter requirements of airforces in the Middle East and North Africa 73 5.1.9.0 Introduction 73 5.1.9.1 Algeria 73

- - - - - <all countries Middle East and North Africa> 5.1.9.18 Yemen 80

5.1.10 Jet fighter requirements of airforces in Asia 81 5.1.10.0 Introduction 81 5.1.10.1 Abkhazia 82

- - - - - <all Asian countries> 5.1.10.32 Vietnam 92

5.1.11 Jet fighter requirements of airforces in Latin America 93 5.1.11.0 Introduction 93

5.1.11.1 Argentina 93 - - - - - <all Latin American countries> 5.1.11.27 Venezuela 98

5.1.12 Jet fighter requirements of airforces in Africa 99 5.1.12.0 Introduction 99 5.1.12.1 Angola 99

- - - - - <all African countries> 5.1.12.44 Zimbabwe 106

5.1.13 Jet fighter requirements of airforces in rest of the world 107 5.1.13.1 Australia 107 5.1.13.2 Canada 107 5.1.13.3 New Zealand 107 5.1.14 References 108 Full list of references #51.1 - #51.130 Appendices 5.1.A.1 Appendix A.1 - PSFD-MOU quantity estimate 2006 126 5.1.A.2 Appendix A.2 - PSFD-MOU quantity estimate april 2007 127 5.1.A.3 Appendix A.3 - PSFD-MOU US estimate by version april 2007 128 5.1.A.4 Appendix A.4 - US Air Force “funded only” estimate april 2008 129 5.1.A.5 Appendix A.5 - PSFD-MOU revised estimate november 2008 130 5.1.A.6 Appendix A.6 - JSFProgram Office quantities April-2009 131 5.1.A.7 Appendix A.7 - FY2009 USMC Aviation Plan October 2008 132 5.1.B.1 Appendix B.1 World Fighter Fleet 2008 and countries of origin 133 Author contact information and background 136

Page 9: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 9 of 136

Tables Table 51.1 JSF World Market 2008-2034 4 and 17 Table 51.2 US Budget as Independent Variable 5 and 29 Table 51.3 Planned LRIP USAF F-35A 23 Table 51.4 Planned LRIP USMC F-35B 24 Table 51.5 Planned LRIP USN F-35C 24 Table 51.6 Planned LRIP and early FRP US F-35s 36 Table 51.7 JSF Market 2008-2034 JSF Partner Countries 41 Table 51.8 Official planning F-35 procurement Australia 42 Table 51.9 Official planning F-35 procurement Canada 43 Table 51.10 Official planning F-35 procurement Denmark 44 Table 51.11 Official planning F-35 procurement Italy 46 Table 51.12 Official planning F-35 procurement The Netherlands 48 Table 51.13 Official planning F-35 procurement Norway 50 Table 51.14 Official planning F-35 procurement Turkey 51 Table 51.15 Official planning F-35 procurement United Kingdom 52 Table 51.16 JSF Market 2008-2034 JSF Europe 56 Table 51.17 JSF Market 2008-2034 JSF Middle East and North Africa 73 Table 51.18 JSF Market 2008-2034 JSF Asia 81 Figures Figure 51.A “Tactical Fighter Budget as Independent Variable” 25 Figure 51.B “JSF Program Performance FY 2009” 26 Figure 51.C “US Navy Aircraft Procurement Budget Justification P-40 FY2009” 27 Figure 51.D “US Air Force Aircraft Procurement Budget Justification P-40 FY2009” 28 Figure 51.E “Consortium Buy proposal 2008” 38

Page 10: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 10 of 136

5.1.1 Optimistic view prior to 2002 SDD participati on decisions “All money is a matter of belief”

~ Adam Smith (1723-1790) On 03-Oct-2000 a report was published by the Military Production Commissioner (DG I&D) of the Ministry of Economic Affairs [# 51.4]. The report not only states "A formal decision on the purchase is still planned for 2007/2008, but a participation in the development phase actually means that a choice has been made". Then on the expected JSF production quantity it reported: "... some 5000 – 6000 JSFs ... production phase will generate NLG 6 billion to NLG 10 billion (US$ 2.7 – 4.5 billion) in sales in The Netherlands .... Off-set work may not be expected " In March 2001 a report followed by the U.S. consultancy company Booz-Allen & Hamilton [# 51.5]. This report indicated that there would be a quantity ranging from 4800 to 7500 JSFs and a Dutch manufacturing turnover of U.S. $ 4.8 billion up to U.S. $ 7.8 billion. Apparently with a calculation factor of U.S. $ 1 million revenue per JSF to be produced in The Netherlands. However, decisive was the "Supplementary Report on the Report F-16 Replacement Steering Committee of November 2, 2001" of the Interdepartmental Steering Committee Replacement F-16, which appears on 23-Jan-2002 [# 51.6]. Here we read: "Lockheed Martin has stated that in case of participation in the Level 2 total Dutch industrial involvement already during the SDD phase $ 800 million of work will be executed in the Netherlands. In total, The Netherlands may expect an amount of US$ 8 billion in orders at a total production of 6.000 aircraft. In addition, engine manufacturers Pratt & Whitney and General Electric each will spend $ 1 billion in the Netherlands. This brings the total Dutch industrial sales at US$ 10 billion. These data were confirmed during the visit of the Secretary of Defense to the U.S. on 18-Dec-2001. This participation is conditioned on best value and competitive pricing and does not constitute a contractual guarantee". This represented an important basis for the agreement of employers, unions of workers and several cabinet members, including then Prime Minister Wim Kok, to accept the participation in the development phase of the JSF, which was the defacto choice for the JSF by The Netherlands.

Page 11: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 11 of 136

5.1.2 Public market analysis was missing in 2002 “The opposite of a correct statement is a false statement. The opposite of a profound truth may well be another profound truth.” ~ Niels Bohr What is striking in examining all documents, is that a well funded (or even superficial) market analysis as attachment to any public report was missing during the period 1999-2001, prior to decisions of several countries to participate in the F-35 development stage. Reports only use general estimates ranging from 4.500 to 7.800 JSFs without specifications. During this period, on 19-Aug-2002 Colonel Dennis Dwyer of the JSF Program Office gave a "Briefing on the capabilities of the Joint Strike Fighter" in Australia in the presence of top industrials, staff members of the Australian Defense Materiel Organization and press [#51.2]. Colonel Dennis said that the JPO estimated a number of of 3002 aircraft for the U.S. and the UK. An estimated 2000-3000 aircraft would be sold abroad to other JSF partner countries and other export customers. He said in the briefing: “Right now these are the quantities that we’re looking at for the US Air Force’s 1763 aircraft, the Marine Corps 609; the Navy 480; and when you add that with the 150 that the United Kingdom has said that they want to purchase, that comes out to 3.002 airplanes. (…….) We estimate – actually three different studies have estimated that there’s anywhere between 2.000 and 3.000 additional aircraft over that 3.002. Obviously the aircraft that our partners are projected to buy, those would be part of the greater than 2.000 number.” [#51.2] It corresponded to what Tom Burbage (Lockheed Martin) was using during this period. Systematically he used a total number of 6.000 JSFs to be manufactured [#51.9, #51.10, #51.22]. What was the rationale for this fundamental pillar under the JSF case? This was and is "confidential" and only the estimated totals were public. The Dutch Bussiness Case used a "high estimate" and a "likely estimate" ,as issued by the JSF Program Office. The exact specification per country of the Lockheed Martin and JSF Program Office projections is unclear.

Page 12: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 12 of 136

5.1.3 Used market expectation JSF Program Office i n 2002 “We find what we expect to find, and we receive what we ask for” ~ Elbert Hubbard (1856-1915) Based on a study of aviation news concerning fighter replacements during 1995 to 2001 [#51.12] and based on well known data of the strength of the airfleet of several airforces, a realistic market analysis can be done of the potential requirement in 2001. A total US and UK requirement of some 3.000 units was mentioned, with Initial Operational Capability planned between 2010 (USMC), 2011 (USAF) and 2012 (USN and Royal Navy). At this time the JSF Program Office (Dennis; see #51.2) was calculating with an additional export potential of 2.000-3.000 units, consisting of export to JSF partner countries, excluding UK (621) and to other non-partner countries, a quantity ranging from 1379 to 2379 units. 5.1.3.1 USA prognose in 2001 [source #51.2] US Air Force 1763 F-35A (replaces A-10, F-16 and complements F-22 Raptor) US Navy 480 F-35C (replaces F/A-18 Hornet; complements Super Hornet) US Marine Corps 609 F-35B (replaces AV-8 Harrier and F/A-18 Hornet, IOC in 2010) Total USA 2852 units 5.1.3.2 Other JSF partner countries, prognose in 2 001 [source # 51.2 and #51.7] The opportunities to selling a number of 150 JSFs to the UK and some 621 units to JSF partner counties could be assumed quite certain in 2002, due to the participation of these countries in the SDD phase: Australia 100 F-35A Canada 80 F-35A Danmark 48 F-35A Italy 160 F-35B/A The Netherlands 85 F-35A Norway 48 F-35A Turkey 100 F-35A UK Royal Navy 60 F-35B (replacement Sea Harrier, IOC in 2012) UK Royal Air Force 90 F-35B (replacement Harrier) Total JSF partner countries 771 units 5.1.3.3 Other export countries in 2001 An analysis of the composition of the fleet of several airforces (quantity and age) can be used to recalculate the “likely estimate”as used by Lockheed Martin and the JSF Program Office in 2002. The countries mentioned in this list are used by Lockheed Martin and the JSF Program Office in several (Power Point) presentations [#51.8]: Europe Belgium ………….. 48 Czech Republic…… 48 Finland…………. 50 Germany … 100 Greece …. 80 Hungary …….. 50 Poland…………… 48 Portugal………. 48 Spain………….. 24

Page 13: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 13 of 136

Switzerland….. 70 Total Europe 566 units Middle East Bahrain…………. 36 Egypt…………. 80 Israël…………. 100 Jordan ……… 48 Kuwait ………. 48 Saudi Arabia . 100 U.A.E…………….. 50 Total Middle East 462 units Asia India………….. 150 Japan………… 100 Singapore……. 50 Taiwan……….. 100 Thailand………. 48 South Korea…….. 80 Total Asia 528 units Total rest of the world 0 units Total : maximum units to non-JSF partners: 1556 . In 2002 when key-decisions are taken to participate in the SDD, the JSF Program Office is still using the number of 1390 units to be exported to non-JSF partners, as a “likely estimate” [#51.52] and is publicly using the number of 2390 as a “high estimate” [Dennis, JPO, #51.2; Burbage #51.9; #51.10; #51.22]. Still in July 2008 the JSF Program Office officially is using these numbers [#51.51]. 5.1.3.4 The JPO “likely estimate” Only with an extreme 90% market share, with the JSF beating all competitors in nearly every potential competition in the market, the “likely estimate” as used by the JSF Program Office in 2002 would become a reality. A number of 1390 export units would be hardly feasible[# 51.51]. Furthermore, it is an estimate about several decades in an uncertain world with a decreasing marketpotential, shrinking defense budgets, without taking into account the changing operational needs in the post-Cold War era 5.1.3.5 The JPO “high estimate” The JSF Program Office used a "high estimate" of 2379 export aircraft. This is no more than a public relations fata morgana, fiction. It has in no way any rational foundation for it. But even in 2007 Lockheed Martin used in a formal presentation in early 2007 (# 51.8, image] wrong information, using names of countries where the potential interest didn’t exist any longer, for exemple Hungary, Czech Republic and Germany. Also General Heinz, deputy program executive officer of the JSF Program Office used the completely fictive number of 6.000 JSFs to be produced during a press conference at the Paris Airshow in June 2009 [#51.101; #51.1012. If the JPO and Lockheed Martin are clearly misinforming partnercountries, using unlikely and even incorrect figures, what reason the governmental organisations should have to use these figures and other important data as a foundation to their budgeting an business cases? Using unreliable figures as foundation of defense budgets and industrial long term policies is irresponsible.

Page 14: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 14 of 136

5.1.4 Downward adjustment of numbers in the JSF pr ess bulletins “Though this be madness, yet there is method in it.” ~Shakespeare (Hamlet) It is very interesting to seeing the development of the promised production quantities in the manufacturer’s public relation bulletins between 2001 and 2009. Nearly all press bulletins are containing a short summary “About the F-35 Lighting II” with a standard phrase about this subject. Also in numerous briefing and PowerPoint presentations the planned numbers are mentioned by Lockheed Martin and JSF Program Office officials. 2001 In 2001-2002 the were always using a number of 6.000 JSF aircraft, p.e. frequently used by Lockheed Martin’s salesmanager Tom Burbage [#51.9, #51.10]. 2003 In 2003 [#51.22] the number of 6.000 aircraft was still unchanged, as may be shown from this standard summary in the press bulletins: “As many as 6,000 F-35s are to be built for the United States and other countries, at a total cost of more than $200 billion over the next 25 years, making this the biggest military aviation project currently under way. The United States may purchase as many as 2,850 of the planes” 2006 However, during the year 2006 they start using the new number of “5.000” [#51.11]: “As many as 5,000 aircraft with at least three design variants include unprecedented design/build cycle reductions, lowest cost of sustainment for 30-year life of fleet.” 2007 Consequently, in the year 2007 in the presentations (Lockheed Martin/JPO) the number has been adjusted downward to “4.000+” [#51.8]”. Also this occurs in the final summary in the official press bulletins, changed now into [#51.23]: “It is projected that more than 4,000 Lightning IIs will be ordered by the United States and international forces.” 2009 In mean time, it seams that the reality becomes more clear to the industrie, at this moment sometimes we may read in the press bulletins: “Lockheed Martin expects to manufacture

more than 3,000 F-35 aircraft, and when full-rate production is initiated in 2015,

Lockheed Martin will manufacture one F-35 aircraft per day.” [#51.24]

Just even the PowerPoint warriors of Lockheed Martin and the JSF Program Office cannot deny the world market reality any longer. The moment of truth is approaching rapidly.

Page 15: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 15 of 136

5.1.5 Need of an updated marketanalysis in 2009 “Men willingly believe what they wish”

~ Julius Ceasar 5.1.5.1 Uncritical use of wrong number of 4.500 JS Fs in The Netherlands Most of the JSF partner countries are still using the wrong number of 4.500 aircraft as a base for their national JSF Business Case. The Netherlands is amongst these countries. Repeatedly Dutch officials have said that there is no reason to adjust this marketexpectation downwards. A recent example is the letter of the Dutch Minister of Economic Affairs Maria van der Hoeven on 24-Mar-2009 [# 51.52]: "The total number of aircraft to be produced was estimated by the JPO in the letter of 01-Jul-2008 at 4500. This number corresponds with previous formal responses from the JPO and therefore has been used in accordance with the MFO in the calculation model. " This parameter (quantity to be produced) is used everywhere. Several countries are using the number of 4.500, sometimes officials are using a higher number, ranging from 5.000 tot 6000 [#51.101, #.51.102]. Without any critical comments the figures are copied from Lockheed Martin and the JSF Program Office (which have a large economic interest in using these numbers). Some recent examples in the Netherlands, include Stork CEO Mr. Vollebregt in interviews and public statements [# 51.55], the Secretary of Defense Jack de Vries [# 51.53], and Dutch General Accountability Office [# 51.54] and press (Paris Airshow 2009) [#51.101]. A typical exemple is the a Report of PriceWaterhouseCoopers, ordered by the Dutch Ministry of Economical Affairs and published in July 2008. Without any critical comments they copy the parameter of 4.500 as key parameter in this report about the Dutch Business Case. A report to be used in key decisions for the Dutch aviation industry is missing each calculation of alternative fighter market scenario’s. What if 3.000’s JSF will be produced, what if 2.500 JSF’s will be produced. An other exemple is the Report of the Dutch “Algemene Rekenkamer” (General Accountability Office) . In the last report about the JSF of February 2009 (“Monitoring JSF 2008” [#51.54]) they do not consider the possibility of a lower quantity and they are using the parameter, set in The Netherlands in 2002, of 4.500 JSF’s. However, a more critical approach would have been necessary, a lower number will have budget effects for the Ministry of Defence (procurement price has a relation with economy of scale) and lower numbers will have a huge effect on the Dutch Business Case. In mean time, it became know that there has been a confidential exchange of letters between Dutch GAO and the Dutch Ministry of Economical Affairs with critical remarks about the number of 4.500 JSFs. However the Dutch Minister of Economical Affaris has refused to accept these critics, quoting and trusting “the latest information” of the JSF Program Office [#51.52]. 5.1.5.2 Reality of 2002 is not the reality of 2009 and beyond Prior to the 2002 decisions about participation much was unknown and uncertain. Many circumstances and facts have been changed since 2002:

- In several countries there are new budget constraints - The dollar consuming wars in Iraq and Afghanistan have had a huge effect at life

times of Western legacy fighter jets - Delay in development and production of the F-35 have changed market possibilities

Page 16: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 16 of 136

- Countries have taken decisions to buy other aircraft - The unit price of a F-35 is 40% or more higher than expected - Life Cycle Cost estimates of the F-35 have been doubled, the F-35 is less affordable - New operational concepts for hybrid warfare are necessary - Unmanned Aerial Combat Vehicles are used in ISR and combat surveillance tasks - New competitors are in the market, like F-15 Silent Eagle and Saab Gripen NG - Several countries have made progress in developing indigenous fighters - There are new balances of power, embargoed countries, new rising powers

However an unchanged number (quantity to be produced 4.500 to 6.000) is still used everywhere in a completely changed world. 5.1.5.3 Retirement is not replacement The overestimated market numbers of the F-35 are based at some typical, and often repeated assumptions. For example, General Heinz, deputy program executive officer of the JSF Program Office told reporters at the Paris Airshow (June 2009) that the “JSF Program could reasonably generatie an astonishing 6.000 sales” [#51.101]. Heinz based his estimate on the 4.425 F-16s sold around the world in various development blocks, combined with 600 F-18 E/Fs and Typhoons. Let’s have a look at this statement: Indeed, many of the 25 countries who bought 4.400 F-16 aircraft could be future customers of the JSF. But, at this moment only 3.000 F-16s are in service, and some 1.400 are retired already. And old F-16s are replaced by new F16s. Also, many F16s will not be replaced on a one-by-one basis. And the delay in operational introduction of the F-35 has made the F-16 Block 52 a strong competitor of the F-35 in certain countries, ruling out the F-35 the next 30 years. Don’t forget some 450-475 F-16s are very young Block 52/Block 60 models with an end-of-service date well beyond the end of production date of the F-35 in 2035. And the F-35 may not be considered as a replacement of recently produced Typhoons or Super Hornets. So General Heinz, accompanied by Locheed Martins Tom Burbage during this press conference is wrong. In Appendix 5.1.B.1 a table shows the World Fighter Market with country of origin, aircraft type, number in service and number of operators. It is telling an other story with a clearly growing marketshare of latest Chinese and Russian aircraft. Sometimes it seems that the marketing people are thinking about “the fighter market” consisting of all the types to be replaced in the next 10-15 years, AV-8 Harriers, A-10 Warthogs, F-4 Phantoms, F-5 Freedom Fighters, F-15 Eagles, F-16 Falcons, F/A-18 Hornets, Dassault Mirages III-V-F1-2000, Tornados, MiG-21s, MiG-29s, Sukhoi-22s, Sukhoi-27s, etcetera. And simply they used a calculator to add them all up and giving themselves a fair marketshare. But retirement is not replacement. And a cheap, small fleet of F-5s or MiG-21s or even fair priced F-16s cannot be compared by an integrated network-centric fighter system. Not any country will need a high-tech stealth fighter or has the budget to pay for it. For example, many of the F-5s will be replaced by used F-16s or new small attack aircraft. Not any country wants to buy US products. And the US doesn’t want to sell the F-35 to every country. 5.1.5.4 World Fighter Fleet replacements 2008-2034 Based on actual fighter fleet data an analysis can be made of the composition of the world fighter fleet by country of origin, by fighter generation and American products in use outside the JSF partnercountries. It may give important information about the market possibilities of the F-35 [#51.108].

Page 17: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 17 of 136

And when General Heinz, deputy program executive officer of the JSF Program Office and Tom Burbage of Lockheed Martin are telling reporters at the Paris Airshow (June 2009) that the “The United States and the eight foreign partners are expected to order about 3.100 planes. Add 1.000 sales to prospective buyers such as Israel, Spain, Singapore, Greece, Japan, Finland and South Korea. Then top up the rest of the world and you get 6.000.” [#51.101 and #51.102], one is wondering why there aren’t more critical questions about that. What number of the 3.100 planes in the JSF partner countries are fixed orders already after 9 years of development? How to sell 1.000 aircraft to the mentioned “prospective buyers”? And how to move from 4.100 planes to 6.000? It’s like a kangaroo, big jumps, empty pouches. After researching all aviation news about fighter jet replacements during the periode 2002 to summer 2009 [#51.13] and several well known databases with data about the fighter fleets of all air forces in the World, one would be able to give a clear estimate of the potential F-35 sales from 2008 until 2034. The results are showing that Lockheed Martin and the JSF Program Office are presenting an irrealistic, over-optimistic view [#51.18; #51.14]. In this paragraph a table summarizes the several market opportunities in several parts of the world. A detailed analysis in the following paragraphs describes the background country by country. Table 51.1 “JSF World Market 2008-2034”

Source: prepared by JOBO An other approach would have been to calculate the defense budget available in each country, especially for material procurement and splitted by Army, Navy and Air Force and more specifically the budgets for jet fighter procurements. Having executed a short (time consuming) investigation of the available data, including analysis of percentages of Gross National Income per country available for defense learns that many countries, mentioned as “JSF opportunities” not even will have the budget available to procuring this high-tech, expensive aircraft in the numbers as estimated by JSF Program Office or Lockheed Martin. Also the effects of the actual Credit Crisis and Economical Recession are not used in this (long term) analysis.

Page 18: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 18 of 136

5.1.6 Detail analysis of the changing US F-35 proc urement 5.1.6.1 Quantities F-35s of the US Air Force Current jet fighter fleet (August 2009) A-10 Warthog Total of 356 A-10A/A-10C/OA-10 The A-10 is undergoing an upgrade/life extension program from 2007-2011 to extend service life until 2028 Some additional 188 A-10s are in storage. F-15 Eagle Total of 663 Boeing F-15 Eagles: 46x Boeing F-15A (152 stored) 9x Boeing F-15B (18 stored) 334x Boeing F-15C (1 stored); 52x Boeing F-15D 178 F-15C/D Golden Eagles to survive until 2025 after Service Life Extension Program to extend their service lifer from 8.000 to 10.000 hours; starting in 2009 222x Boeing F-15E Deliveries from 1989, but subject to continuous upgrades to ensure service until 2035 F-16 Falcon Total of 1215 Lockheed Martin F16s: 0x Lockheed Martin F-16A no longer current 2x Lockheed Martin F-16B (and 49 stored) 1041x Lockheed Martin F-16C (and 22 stored) 172x Lockheed Martin F-16D The average age of the USAF F-16s is about 20 years. As part of its proposed combat restructuring plan, the Air Force plans to retire 123 aging F-16s. F-22 Raptor 124x Lockheed Martin F-22A Raptor (4 withdrawn; 2 lost) deliveries from 2003) 57x Lockheed Martin F-22A Raptor ordered

Page 19: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 19 of 136

5.1.6.2 Quantities F-35s of the US Marine Corps Background The USMC currently has 12 active VMFA/VMFA(AW) squadrons and one reserve VMFA squadron with F/A-18 Hornets. This is a reduction in force structure created as a result of two active and two reserve squadrons being placed into cadre status. This reduction was caused by a shortage (2008) in strike fighter inventory of some 50 strike fighters. It should be recuperated with the F-35, however this may be higly uncertain. The average age of F/A-18A-B Hornets is 23 years. The average age of F/A-18C-D Hornets is 15 years. There are 7 active VMA squadrons with AV-8 Harriers. And a training unit with AV-8 and TAV-8 Harriers. The average age of AV-8 Harriers is 12 years; the average age of TAV-8 Harriers is 19 years. Current jet fighter fleet (August 2009) 110x McDonnel-Douglas AV-8B Harrier (and 19 in depot) 16x McDonnel-Douglas TAV-8B Harrier 36x Boeing F/A-18A Hornet (and 15+ in depot) 2x Boeing F/A-18B Hornet (and 10+ in depot) 78x Boeing F/A-18C Hornet (and 15+ in depot) 76x Boeing F/A-18D Hornet (and 15+ in depot) Total jet fighters (active): 308 Opportunities Joint Strike Fighter The “Force Goal” was defined in the FY2009 USMC planning (October 2008) was a total of 348 Lockheed Martin F-35B Lightning IIs (STOVL version) consisting of: 140 in 14 VMFA squadrons with 10 F-35Bs 112 in 7 VMFA squadrons with 16 F-35Bs 30 in 3 (RC) VMFA squadrons with 10 F-35Bs 60 in 3 FRS squadrons with 20 F-35Bs 6 in 1 testunit with 6 F-35Bs In Appendix 5.1.A.8 some tables from the USMC FY2009 Marine Aviation Plan (October 2008) show the official planning of the US Marine Corps. The May 1997 QDR planned a procurement of 609 JSFs for the US Marine Corps. In March 2002 the Pentagon was reviewing a proposal to cut JSF production by by 409 aircraft, 259 jets from the US Marine Corps buy, and 150 from the Navy purchase, and limit the US Marine Corps buy to some 350 F-35B’s. Since the start of the Joint Strike Fighter program in 2001 a continuous move in numbers to future years can be seen, as shown in Table 51.4 (paragraph 5.1.6.4.4). In 2001 a number of 96 F-35Bs was planned to procure from FY2005 until FY2009, this has been changed into only 13 F-35Bs. Also a total number of 222 F-35Bs was planned from FY2005 until FY2013, this has been changed into only 90 F-35Bs. This is a confirmation of the fighter gap, as calculated by several USMC staffers. During a hearing on Air Force and Navy aviation programs of the Senate Armed Service Committee on April 9, 2008, Rear Admiral Allen Myers projected a "most-optimistic" deficit of 56 strike fighters for Marine Corps [#51.93]. The projected gap will peak around 2017, but is an optimistic estimate, because it assumed that the service life of F/A-18 Hornets could be extended from 8,000 flight hours to 10,000 (original service life was 6,000 flight hours). In a Congressional Research Service (CRS) report in April 2009 a more realistic (larger) gap was used, based on a briefing to House Armed Services Committee staffers in which the Navy projected that the strike fighter shortfall could grow to 114 Marine Corps fighters [#51.94].

Page 20: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 20 of 136

5.1.6.3 Quantities F-35s of the US Navy Background Mainstay of the US Navy at this moment is the Boeing F/A-18 Super Hornet. The Super Hornet first flew in 1995. Full-rate production began in September 1997. The U.S. Navy currently flies both the F/A-18E single-seater and F/A-18F two-seater in combat roles, replacing the retired F-14 Tomcat, A-6 Intruder, S-3 Viking, and KA-6D. An electronic warfare variant, the EA-18G Growler, will replace the aging EA-6B Prowler. The May 1997 QDR reduced procurement to 480 for the Navy and noted that up to 230 of the Navy's 480 JSFs could be replaced by F/A-18E/Fs, depending on the progress of the JSF program and the price of its Navy variant compared to the F/A-18E/F. Under the QDR 1997 a total of 548 Super Hornets could be procured. In April 2002 the Pentagon was reviewing a proposal to cut JSF production by 409 aircraft, 259 jets from the US Marine Corps buy, and 150 from the Navy purchase to a total of 330 F-35Cs; and limit the US Navy's F/A-18E/F acquisition to 460 aircraft versus 548 planned in the QDR 1997. The Department of the Navy was concerned that it could not afford the number of tactical aircraft it planned to purchase and reduced the number of backup aircraft needed The F/A-18 Hornets are being flown at higher rates than originally planned. At this moment half of all tactical flights into Afghanistan are conducted by carrier based US Navy Hornets and Super Hornets, wearing out these planes much faster than expected [#51.121]. This contributes to the predicted tactical fighter gap in 2017 and is feeding pressure to buy more Super Hornets. Several times in 2007, 2008 and 2009 [#51.117; #51.118, #51.120] it was reported that the US Navy was considering buying additional F/A-18 Super Hornets to close the “fighter gap”. In April 2009 House Armed Services Committee [#51.119] has requested the Pentagon to study a new multi-year contract. In FY2010 the US Navy intents to buy a further 31 F/A-18s. It is unlikely that the Obama administration will take a positive decision on a multiyear agreement for more F/A-18 purchases until after completion of the new Quadrennial Defense Review and prior to the FY2011 budget [#51.121]. Current jet fighter fleet (August 2009) F/A-18A-D Hornet Total 409x Boeing F/A-18 Hornets (and 30 stored): 59x Boeing F/A-18A Hornet (and 30+ in depot) 16x Boeing F/A-18B Hornet 287x Boeing F/A-18C Hornet 47x Boeing F/A-18D Hornet F/A-18E-F Super Hornet/EA-18 Growler Based on the currently known numbers the total production of US Navy F/A-18E/F Super Hornets and EA-18 Growlers will end in FY2011 with a total number of 546 aircraft. Since the start of the operations 13 aircraft are crashed of withdrawn, making a remaining number of 533 aircraft [#51.122]. 176x Boeing F/A-18E (19 more to be delivered, total 195 planned) 216x Boeing F/A-18F (25 more to be delivered, 9 requested FY2010, total 250 planned) 10x Boeing EA-18G (46 more to be delivered, 32 requested FY10/FY11, total 88 planned)

Page 21: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 21 of 136

During a hearing on Air Force and Navy aviation programs of the Senate Armed Service Committee on April 9, 2008, Rear Admiral Allen Myers projected a "most-optimistic" deficit of 69 strike fighters for the US Navy [#51.93]. The projected gap will peak around 2017, but is an optimistic estimate, because it assumed that the service life of F/A-18 Hornets could be extended from 8,000 flight hours to 10,000 (original service life was 6,000 flight hours). In a Congressional Research Service (CRS) report in April 2009 a more realistic (larger) gap was used, based on a briefing to House Armed Services Committee staffers in which the Navy projected that the strike fighter shortfall could grow to 129 US Navy fighters [#51.94]. Opportunities Joint Strike Fighter A total of 680 F-35Bs and F35Cs was defined in the MOU-PSFD of April 2007 for the US Department of Navy and, officially didn’t change since 2007. The “Force Goal” of the US Marine Corps was defined in the FY2009 USMC planning (October 2008) at a total of 348 Lockheed Martin F-35Bs, so the official number of US Navy F-35C Lightning IIs (CV version) would be 332 aircraft. In April 2002 the Pentagon was reviewing a proposal to cut JSF production to a total US Navy purchase of 330 F-35Cs and limit the US Navy's F/A-18E/F acquisition to 460 aircraft, making a total of 790 future US Navy Jet Fighters. With the delayed Initial Operational Capability date of 2015 and the growing US Navy “fighter gap” some 90 more F/A-18 Super Hornets were procured than originally planned: 546 in stead of 460. The budget of the US Navy to buy the original planned number of 330 F-35C’s has become under pressure by these additional Super Hornet buys [#51.15; #51.41; #51.42]. Since the start of the Joint Strike Fighter program in 2001 a continuous move in numbers to future years can be seen, as shown in as shown in Table 51.5 (paragraph 5.1.6.4.4). In 2001 a number of 61 F-35Cs was planned to procure from FY2005 until FY2009, this has been changed into zero F-35Cs. Also a total number of 199 F-35Cs was planned from FY2005 until FY2013, this has been changed into only 42 F-35Cs.

Page 22: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 22 of 136

5.1.6.4 What will cause lower F-35 numbers within the US forces 5.1.6.4.1 General budget constraints The government of Reagan managed to spend just $4.2 trillion in inflation-adjusted dollars to US military, during the eight years of his famous defense "spend-up" in the last decade of the Cold War. However the numbers of fighter jets purchased by US forces declined. In the FY 1986 the Pentagon purchased 387 combat aircraft, while the FY 1998 budget bought 28. [#51.116]. The government of George W. Bush, aided by Donald Rumsfeld and Robert Gates, spent some $5.0 trillion in inflation-adjusted dollars 2002 to 2009. The government of Obama planss to spend $5.1 trillion between 2010 and 2017, assuming Obama is elected to two terms. Obama plans to outspend Reagan by 20%. However this doesn’t mean that important and necessary replacements of aircraft within the US Forces have been fielded. All important replacements have been postponed to the future. The 1960s venerable B-52 Stratofortress strategic bombers, the B1B Lancer bomber force: no real planning to replace or upgrade them. The higly aged tanker fleet of some 430 forty to fifty year old Boeing KC135 tankers: no decision about the replacement, but over US$ 100 billion will be needed. The heavily used transportation fleet of C-17s, old C-130s and C5s will need upgrades or replacement. The F-15 air superiority fleet isn’t replaced by the planned 780 F-22 Raptors, but by a small force of about 180 aircraft. Old F-16s and F-18s are at the end of their projected life now, without short term perspective for replacement. So grow in budget, didn’t bring new capacity. And the money (hundreds of billions) to field all urgently necessary capacities has to be divided amongst many stakeholders within the US forces. And the financial crisis in the US with formidable budget deficits of the government and the money consuming war in Afghanistan will not make it more easy. Like Thomas Ehrhardt, special assistant of the Chief of Staff ot the USAF in his latest CSBA Report “An Air Force Strategy fot the Long Haul” [#51.126, p. 89] of September 2009 writes: “Accordingly, in addition to cutting back the procurement of F-35As, the Air Force should cut back its planned legacy fighter force structure some 35 percent by 2015, reaching about one thousand combat coded fighters and sustain this level through 2028.” Conclusion : The need to replace the enormous fleet of decades old strategic bombers, tankers, transport aircraft and jet fighters after years of delay cannot be done at the same time and a balance has to be found between several operational needs. This will give a high pressure on the available budgets of the F-35 Lightning II. 5.1.6.4.2 Delays in development The JSF would be developed as a complementary air-to-ground capability to the airsuperiority fighter F-22 Raptor. The 2001-plans envisaged a start to be made on quantity production of the F-35 in 2004, with procurement of first long-lead items for low-rate initial production series 1 (LRIP 1). The initial phase of full-rate production (FRP 1) had to be launched with procurement of long-lead items in 2007; coincidenting with the JSF attaining Initial Operational Capability. In relationship to the 2001 planning the development is over 4 years late. The move of some essential capabilities (weapons, sensors) from early Blocks to later Blocks, to be operational in 2017-2020 makes the F-35 less attractive in relationship to other operational alternatives. The in 2008 reported risk of additional slip in development may force, like Colonel Dr. Thomas Ehrhard, special advisor of USAF Chief of Staff recently wrote [#51.126] “to choose either to stay on its production schedule with insufficiently tested Block 3.0 versions that will likely need costly upgrades later, or to settle for a Block 2.0 derivative in the interim as incurs additional development costs” (and accept a less capable aircraft). Conclusion: Each year of delay means a less competitive F35 and a negative impact on the operational capabilities in relationship to alternatives. Upgrading cost of early (less capable) Blocks to later Blocks will have negative budget effects. This means less F-35s.

Page 23: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 23 of 136

5.1.6.4.3 F-35 as a post-Cold War concept, new wars need new concepts In fact the JSF is a 1990s post-Cold War concept. There will be 16 years between the start of the program and the Initial Operational Capabilty. During the development stage the design has been frozen, but competitors are developing new technologies and tactics. A delay of some years means that when the F-35 becomes operational is not on the leading edge as was promised in the late 1990s, but an obsolete aircraft. Within the US forces there not only is a need for alternatives to fill the fighter gaps in the US Air Force with rapidly aging F-15s and F16s, to fill the fighter gaps within the US Navy and US Marines with rapidly aging AV-8s and F/A-18s. No, operational concepts are changing. Alternatives that weren’t available in 2001 like Unmanned Combat Aerial Vehicles are available now. The actual lessons learned from the (hybrid) wars in Iraq and Afghanistan, changing balance of power around the world with a fast developing Asia, will have consequences. New operational concepts are born, more affordable alternatives are being developed. We may quote Colonel Dr. Thomas Ehrhard, special advisor of USAF Chief of Staff “The F-35 represents a classic “middle-weight” capability – excessively sophisticated and expensive for persistent strike operations in the benign air environments of the developing world and most irregular warfare operations, yet not capable enough to contribute effectively to a stressing campaign against a nation employing modern anti-acess/area-denial defenses.” [#51.126]. Conclusion : the F-35 concept as a post-Cold War concept will be partly obsolete due to the many years of delay between (frozen) design and (late) operational introduction. This will effect the required quantity. 5.1.6.4.4 Delays in production The original planning was to deliver the first operational F-35s in FY 2008 and the US production rate was expected to rise to a peak of 122 per year by 2011. The 2001-plans envisaged a start to be made on quantity production of the F-35 in 2004, with procurement of first long-lead items for low-rate initial production series 1 (LRIP 1). The initial phase of full-rate production (FRP 1) had to be launched with procurement of long-lead items in 2007; coincidenting with the JSF attaining Initial Operational Capability. Production for the UK and USA had to reach 13 aircraft per month in 2013, and the lines production capacity would be "considerably" greater than that. The reality is totally different. A delay of Full Rate Production from 2008 to 2015 or later, that means 8 years. IOC delayed from 2007 to an uncertain 2012. This means a delay of 5 to 7 years with negative impact on the number of F35s to be produced, as shown in these tables: Table 51.3 “Table of planned LRIP USAF F-35A” Table of planned Low Rate Initial Production US Air Force F-35A

---------------------------------------------------

Initial Sep Nov Apr Nov

2001 2006 2006 2007 2008

---------------------------------------------------

FY05 6

FY06 14

FY07 20 5 5 2 2

FY08 30 9 8 6 6

FY09 44 22 17 8 7

FY10 72 32 20 12 10

FY11 (110) 48 28 24 24

FY12 (110) 84 54 42 42

FY13 (110) 110 85 48 48

------ ------ ------ ------ ------

Total 516 310 217 142 139

Initial 2001 planning contained LRIP-1 to LRIP-6 and FRP funding from FY2011. Table 51.4 “Table of planned LRIP USMC F-35B”

Page 24: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 24 of 136

Table of planned Low Rate Initial Production US MARINE CORPS F-35B

-----------------------------------------------------

Initial Sep Nov Apr Aug

2001 2006 2006 2007 2009

-----------------------------------------------------

FY05 4

FY06 8

FY07 20 0 0 0 0

FY08 32 9 8 6 6

FY09 32 20 20 8 7

FY10 36 26 24 14 14

FY11 (30) 25 24 13 13

FY12 (30) 25 30 25 25

FY13 (30) 25 35 25 25

------ ------ ------ ------ ------

Total 222 130 141 91 90

Initial 2001 planning was containing LRIP-1 to LRIP-6 and FRP funding from FY2011.

Source: prepared by JOBO

Table 51.5 “Table of planned LRIP USN F-35C”

Table of planned Low Rate Initial Production US NAVY F-35C

----------------------------------------------------

Initial Sep Nov Apr Aug

2001 2006 2006 2007 2009

----------------------------------------------------

FY05 0

FY06 0

FY07 9 0 0 0 0

FY08 20 0 0 0 0

FY09 32 10 10 0 0

FY10 48 12 12 4 4

FY11 (30) 25 12 6 6

FY12 (30) 24 19 15 15

FY13 (30) 8 15 17 17

------ ------ ------ ------ ------

Total 199 79 68 42 42

Initial 2001 planning was containing LRIP-1 to LRIP-6 and FRP funding from FY2011.

Source: prepared by JOBO Until FY2013 the US would buy around 937 F35s. The quantity has been lowered year by year until only 273 units. That means that since 2001 over 660 units were deleted from the JSF production planning until FY2013. The question is: how to find “back” the money that would have been spend between 2005 and 2013? Conclusion: Each year of delay means less F-35s. Once deleted from budget, the money is spend to other priorities, alternatives are found for the most urgent operational requirements. It will be difficult to get scrapped numbers back.

Page 25: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 25 of 136

5.1.6.4.5 Cost growth and “Budget as Independent Variable” In the conceptual design stage of the F-35 the Cost as Independent Variable played an important role, trading off Key Performance Parameters and Non-recurrent Unit Cost. But one could consider the available yearly budget for tactical fighters also as a kind of “Independent Variable” with a trade off between procurement quantity and Program Cost. And there is a deadly embracing between quantity and price within the F-35 Program. Cutting procurement quantities tends to loss of production efficiency, leading to higher unit costs. Higher unit costs are leading to lower quantities to be procured and a search for alternatives. The Total Budget for the Tactical Fighter capacity may be considered as a constant factor. A simple mathematical calculation learns: Budget As Independent Variable : Budget = [Capacity 1 (qnt*prc)] + [Capacity 2 (qnt * prc)] + ………. + [Capacity n (qnt * prc)] This means, when the Budget is an Indepent Variabel, that, when the quantity within one Capacity grows, there will be less money for other Capacities have to be lower. Also when the price within one Capacity grows, there will be less money for other capacities. In the past (FY1975 until FY2007) funding for tactical aircraft -including the last Cold War period- has been about 10% of overall procurement budget or about (inflation adjusted) US$ 8.9 billion per year. With the current procurement top procurement budget line of some US$ 100 billion, the long term annual funding for tactical fighter jets some US$ 212 billion over the FY2009-FY2034 period, or US$ 8,1 billion per year. Based on the latest 2007 long term F-35 procurement plan to buy all 2.443 F35s would require an average of US$ 7,45 billion a year over the FY2009-2034 period, assuming there is no further cost growth in the JSF Program. Given the fact that cost growth is likely, the US$7,45 billion will not be sufficient. The Pentagon Joint Estimated Team reported in September 2008 further cost growth [#51.124]. The US GAO reported in March 2009 that further cost growth and delays would be likely [#51.125]. Figure 51.A “Tactical Fighter Budget as Independent Variable”

Source: prepared by JOBO

Page 26: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 26 of 136

Given, the fact that from the US$8.1 billion per year several billions will be needed to funding AO-X, UCAVs, a possible new “B3” midrange bomber capability, upgrading early Block F-35s, upgrading F-22s and legacy fighters to fill the fighter gap, procurement of Super Hornets in FY2009-FY2011, etcetera., it is unlikely the 2.443 planned F35s can be procured. It can not be assumed that the 10% of overall procurement budget, now used for tactical fighter procurement, will rise, because there is a need to replace or upgrade many other aircraft (B-52, transport, tankers, helicopters) and because there are budgetary pressures related to the growing total US government deficit. Conclusion: Budget as Independent Variable has consequences: - The F-35 program has proved to have difficulties to be as affordable as promised. When we have a Budget as an Independent Variable a cost growth of about 40% means a decrease in quantity of 30%. In the next paragraph 5.1.6.4.10 some effects are illustrated for a minor cost growth of 5 to 20% (table 51.2). - Once a quantity in a fiscal year has been made lower, later it cannot be compensated, because the budget money is a year by year struggle and will have been used for other budget priorities - Moving money to fill the fighter gap with a higher quantity of legacy fighters means a lower quantity of F-35s - Moving money to a higher quantity of Unmanned Aerial Vehicles means a lower quantity of F-35s - Moving money to a new quantity of OA-X or a new quantity of medium range manned or unmanned tactical bombers means a lower quantity of F-35s 5.1.6.4.6 Program Unit Cost growth of 38% since 2001 The unit cost of the F-35 has already risen substantially over the past years, the program unit cost (inflation corrected) are 38,4% higher than projected in 2001. Figure 51.B “JSF Program Performance FY 2009”

Source: US GAO 09-326SP March 2009, page 93 [#51.125] The program unit cost growth of 38% since 2001 and total estimated procurement cost growth must effect the quantity. However since the QDR 2002 the total quantity to be procured is still the same. This would be unlogicial, assuming the Budget as Independent Variable. The solution (in early 2007) was found in extending the procurement period until 2035 and moving their requirements to a far and uncertain future, from Fiscal Year 2028 to Fiscal Year 2035.

Page 27: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 27 of 136

The planned annual production of 160 F-35s (110 US Air Force and 50 USMC/USN) by around 2015-2024 was decreased to some 115 F-35s a year, however effecting the economy of scale. Conclusion : the effect of the program cost growth has been shifted to a far future and negative effects on the economy of scale in short term are not recalculated. 5.1.6.4.7 Further cost growth may be expected The Pentagon Joint Estimated Team reported in September 2008 further cost growth [#51.124]. The US GAO reported in March 2009 that further cost growth up to US$ 7.4 billion and new delays of another three years would be likely [#51.125]. Even modest cost growth will have significant consequences in terms of budget versus possible quantity to be procured. With an average budget of US$ 7,45 billion, a relative small cost growth of 10% means some US$ 745 million or the equivalent of 7 to 8 F35s per year during 26 years. Conclusion : Cost growth may be expected and with a Budget as Independent Variable, a higher price means lower quantities. Requirement of the Forces is not the same as available funding. 5.1.6.4.8 Current budget insufficient The currently used number of 2.443 F35s for the US Forces is a “requirement”. But operational requirement (as used in JPO MOU-PSFD planning and suggested world wide) is not the same as available US Department of Defense funding. The long term annual funding for tactical fighter jets some US$ 230 billion over the FY2007-FY2034 period, or US$ 8,1 billion per year. In the Fiscal Year 2009 Aircraft Procurement Budget (February 2008) we may find a total planned budget of: US Air Force : US$ 171,7 billion, 1763 F-35As, average procurement price US$ 97,4M US Navy : US$ 89,7 billion, 680 F-35B/Cs, average procurement price US$ 131,9M Total : US$ 261,4 billion, 2443 F35s, average procurement price US$ 107M This means a total of about US$ 261,4 billion during the FY2007-FY2034 period for the operational “required” F-35s only, against an available funding of US$230 billion. Conclusion 1 : Considering the total budget of US$ 230 billion this means a hidden direct deficit of US$ 31 billion in funding (in other words: an equivalent of some 290 F35s). Assumung there is no any further cost growth. The reality: operational requirement is not the same as available funding. Figure 51.C “US Navy Aircraft Procurement Budget Ju stification P-40 FY2009”

Source: US DoD, February 2008

Page 28: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 28 of 136

Figure 51.D “US Air Force Aircraft Procurement Bud get Justification P-40 FY2009”

Source: US DoD, February 2008, comments prepared by H KPTwo © Conclusion 2: Considering the total budget of US$ 230 billion is a budget for all tactical fighter needs, including new OA-X and UCAV requirements, near term F/A Super Hornet procurement, upgrading F22s and early Block F35s, possible transfer of money to new medium range fighters or new generation (to be funded) “B3” bombers, the deficit in funding is much larger and can be estimated at some US$ 60-80 billion (or more). This means an equivalent of a quantity of 560 to over 750 F35s. 5.1.6.4.9 Lower (world wide) quantities mean further cost growth Delay of F-35 system development, delay of low rate production and full rate production with several years, the uncertainties about a (fixed) price, a “level line price” or a “consortium buy price”, the uncertain delivery schedule and the political situation have caused delays in most of the JSF partner countries. Not only they delayed the decisions, also a lower number will be procured. In the international market no any fixed Foreign Military Sales order could be materialised. This effects the economy of scale of the production facilities world wide. Conclusion : the effects of the delay in international, decreasing the expected economy of scale, will cause a higher unit proce. These effects are not recalculated.

Page 29: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 29 of 136

5.1.6.4.10 Deadly embracing between lower quantities and higher price Considering the expected cost growth as a result of other factors, as shown in previous paragraphs, a negative spiralling effect may be expected of (1)higher price-makes-lower quantities, and (2) lower quantities is less economy of scale; and (3) less economy of scale makes higher prices; etcetera. This will give the additional effect of a deadly embracing between decreasing quantities and increasing unit prices and life cycle costs. The effects as summarized in the previous paragraphs can be recalculated for the total procurement quantity until FY2034, as shown in Table 51.2. Table 51.2 “Budget as Independent Variable”

Source: prepared by JOBO, based on US DoD and public data Conclusion : further cost growth and other tactical fighter budget priorities will have an important influence at the total F-35 procurement. It is safe to predict that, given the budget, given the other budget priorities and estimated cost growth a quantity of only 1170 to 1590 F35s can be procured by the US forces until FY2034. 5.1.6.4.11 Fighter gap: alternatives found in short term Within the US forces there is a need for alternatives to fill the fighter gaps in the US Air Force with rapidly aging F-15s and F16s and the US Navy with aging F/A-18 Hornets. Some upgrade programs (F-15Es, O/A-10 until 2028) wouldn’t have been proposed. Also additional F/A-18 Super Hornets buys in FY2008 until FY2011 wouldn’t have had any chance when the F-35C had been in time. Also development of other alternatives wouldn’t have had such a high priority when the F-35 had been fielded in time (some UCAV, OA-X). Conclusion : the F35 delays lead to a need to fill the fighter gap with other available options. 5.1.6.4.12 Fighter gap will lead to closed squadrons The US fiscal year FY2010 defense budget request would end production of the F-22A Raptor at 187 fighters and retire 250 of the oldest fighters. This would not produce sufficient new fighters to replace the legacy planes as they retire from service [#51.91].

Page 30: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 30 of 136

In April 2008, Lieutenant General Daniel Darnell testified before the Senate Armed Services Committee that the Air Force could have a requirement gap of over 800 fighters by 2024 [#51.92]. If the Super Hornet production is cut off and the F-35C will be delayed, the US Navy will have the need to populating the carrier air wing with 2 fighter squadrons as opposed to 4. Not yet considering the rapid aging of the legacy F/A-18 Hornets at the rate they US Navy and US Marine Corps are using them. A Congressional Research Service (CRS) report in April 2009 unveiled a potentially larger gap, citing a briefing to House Armed Services Committee staffers in which the Navy projected that its strike fighter shortfall could grow to 50 aircraft by FY 2010 and 243 by 2018 (129 Navy and 114 Marine Corps fighters) [#51.94]. In the near future many F-15, F-16 and F/A-18 squadrons have to be closed, because the needed replacement cannot be delivered in time. Squadrons cannot be closed for some years and restart again. It will be an irreversible process of leaking away of operational experience, maintenance knowledge, etcetera. Pilots and personell involved will find other jobs. Conclusion : Closed squadrons will be closed for ever. This will have an irreversible effect. Closed squadrons will never get F-35s. 5.1.6.4.13 Fighter gap and budget constraints will lead to smaller squadrons Another factor is what Airforce Magazine wrote in April 2008 [#51.95]: “To compensate, the Air Force has altered the traditional per-squadron aircraft numbers so as to increase the number of squadrons. It now considers the standard F-22 squadron to have 18 airplanes, not 24. Even so, the plan struggles to flesh out seven squadrons, and the smaller units have higher overhead costs with less flexibility and combat power.” And like Thomas Ehrhardt, special assistant of the Chief of Staff ot the USAF in his latest CSBA Report “An Air Force Strategy fot the Long Haul” [#51.126, p. 88 + footnote] of September 2009 suggests: “540 combat coded F-35As, this would yield thirty squadrons” (of 18 F-35s). And in the footnote: “The specifics of the cut were based on AEF structure, with three eighteen-aircraft squadrons per AEF…. Note that because F-35A units will not have a primary air-to-air operational mission, they also do not require twenty-four-jet squadrons to conduct 24/7 operations, as would the F-22.” Conclusion : Smaller squadrons will have less F-35s. 5.1.6.4.14 Growth of Unmanned (Combat) Aerial Vehicles The Pentagon is increasingly focussing on Unmanned (Combat) Aerial Vehicles (UAV/UCAVs). A quote in an US Air Force bulletin of 13-aug-2009 [#51.90] shows this: “In April 2009, Secretary Gates cited unmanned aircraft systems as an increasing part of the Air Force arsenal, as he recommended that Congress halt production of the F-22 Raptor fighter jet and devote more funding to unmanned systems. The secretary compared the F-16 Fighting Falcon and the Reaper unmanned system, noting that the Reaper has a range of about 3,000 miles and can carry 1.5 tons of weapons -- all unmanned and remotely -- while the manned F-16 fighter has a range of about 500 miles. The ability to sneak in and operate for long periods of time without risking aviators is incredible, the general said. He referenced a recent mission in which a RQ-4 Global Hawk unmanned system flew for 33 straight hours conducting reconnaissance operations for ground commanders in Iraq and Afghanistan. Unmanned aircraft systems, he added, can take off from the Middle East, go to Iraq and Afghanistan, and conduct missions for both theaters.”

Page 31: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 31 of 136

At the Association for Unmanned Vehicle Systems International's Unmanned Systems North America 2009 Convention, which began 09-Aug-2009 and ended 13-Aug-2009 in Washington more than 5.000 people from 30 countries took part in the exhibition of robots and unmanned systems capabilities showing numerous UAV and UCAV solutions. In Fiscal Year FY2009, the USAir Force has spent more money on unmanned aircraft systems and trained more operators than fighter jets and fighter pilots [#51.90]. Demand for unmanned systems by the U.S. military has increased more than 660 percent since 2004 and will double again between 2010 and 2015. This means a major shift of budgets and US military employees from manned fighters to unmanned systems, especially for battlefield Intelligence, Surveillance and Reconaissance (ISR) missions. In the next QDR we may find this back this opinion of Thomas Ehrhardt, special assistant of the Chief of Staff ot the USAF [#51.126, page 44]: “The same ill fit appears on the other end of the conflict spectrum, where the F-35s low-observable features, escalating cost, and nineteen million lines of computer code make it a great deal more expensive to buy, and more complicated to operate and sustain, than the Predator or Reaper UAVs, which are performing well beyond expectations and scoring the majority of high-value hits in Iraq and Afghanistan.” Conclusion : there is a major shift towards Unmanned (Combat) Aerial Vehicles. This will bring down the numbers of F-35s to be purchased: other operational needs and budgets moved from F-35s to UCAVs.

5.1.6.4.15 Changing operationeel needs new OA-X (light attack/observation aircraft) On 23-dec-2008 US Air Force Air Combat Command issued a document titled “OA-X Enabling Concept ” to frame an operational construct for ACC’s fielding of light attack/observation aircraft, referred to as OA-X, in support of Combatant Commander’s close air support (CAS), armed reconnaissance, non traditional intelligence, surveillance and reconnaissance (ISR), show of force and peace enforcement. The document confirms there is a need for alternative “lower cost air capabilities” ($2.2.1) and that continued reliance on A-10, F-16 and F-15E fleets is too expensive and will significantly reduce airframe lifespan. The assumption is made that “The USAF will continue to operate in a fiscally constrained environment” ($2.2.6). The ACC is aware that a new OA-X will mean less F-35’s: “Funds for procurement of the OA-X system could threaten funding for procurement of newer air-ground capable aircraft (e.g. F-35)”. The document concludes that the US Air Force’s operations in Afghanistan consists mainly of a continuous armed overwatch presence using high performance fighters. And that the US Air Force could save 300 millions of dollars each year in fuel and operation costs alone if it replaced one deployed squadron F-16s and half of a squadron of F15Es with smaller, light-attack aircraft that could essentially conduct the same mission. ($3.2 and $3.3). The ACC concludes “we must be able to operate across the full range of military operations, but lacks a “right-tech” solution required in Irregular Warfare and lower-threat conditions across the spectrum of conflict. In accordance with DoD Directive 3000.07, 1-dec-2008, the USAF must recognize that IW is as strategically important as traditional warfare”. The report says that the “employment of high-performance fighters, originally designed for Main Combat Operations in an integrated air defense environment (typically the F-35), is an expensive method of providing a constant level of support”. The ACC advices the use of OA-X aircraft in low-threat environments ($4.5); the use by Partner Countries ($4.5.1 and $5.4.1) and US Air National Guard ($5.4.2; $9.3.1). Remarkable is $6.3 “Assignment of pilots to OA-X units will help assure expertise in the above missions (CAS, FAC, Armed Reconaissance, ISR) is assured within the CAF when legacy aircraft are retired and before significant fielding of the F-35. This will enhance the USAFs ability to source F-35 units with properly experienced aircrew it will have fewer of

Page 32: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 32 of 136

otherwise.” In fact, this is an implicit statement that there will be a fighter gap between retirement of F16s and arrival of F35s. The document calls for the need of Remote Operated Video Enhanced Receiver (ROVER) to communicate with Army units, a capacity that the F-35 will not offer until the Block 5 software, planned for 2018-2020 ($7.5.2.2). Also remarkable is the plead for a two seat aircraft to diminish workload of the crew (sensor control or weapon allocation; $7.6.2), where the F-35 is a single seat aircraft only. The OA-X needs to have an unrefueled range of 900 miles, much more than the F-35 ($8.1.1). The OA-X may have the capability to be used without special mission equipment ($8.2) and must be “a less advanced system which delivers an affordable attack capability in place of higher end U.S. systems.” ($8.3). The ACC sees the role of the OA-A complementary to a high-end fighter, not restricted to Irregular Warfare, but the OA-X “may reasonably be tasked to conduct CAS, airbase defense, maritime interdiction, armed reconnaissance missions” ($9.1). Also mentioned: “counternarcotics” , “antipiracy operations and border patrol”. ACC advices “OA-X squadrons will deploy as expeditionary fighter squadrons under the operational control of the gaining theater’s commander” ($10.3). Lt. Col. Michael Pietrucha -- ACC’s Joint Air-Ground Combat Division’s irregular warfare action officer told Inside Defense on 20-aug-2009: “The Air Force’s light-attack plane initiative could spur purchases of different aircraft that could address both near-term and long-term threats. This could include single-engine and multi-engine aircraft or even a series of aircraft - in terms of a turboprop or jet-driven aircraft -- when it comes to the OA-X. There are a variety of potentially useful things that will fall under an OA-X umbrella.” Conclusion : Because F35s are too high-tech, too expensive, too late, the US forces have defined the need for a more simple “complementary” aircraft. A new threat to the production quantities of the F-35, the deadly embracing of the “lower production numbers-higher price spiral” is continuing.

5.1.6.4.16 Changing operational needs: new 4.5 gen fighters The US Air National Guard will be hit heavely by the delay of the F-35. The call to purchase additional fourth-generation fighters (new generation advanced F-16s) for the Air National Guard is growing, because the air sovereignty mission remains a critical component of America's homeland defense posture. As one source writes: “Many at the Pentagon and in Congress seem prepared to gamble in the medium term that the F-35 will eventually help the atrophying Air National Guard to sustain the air sovereignty mission, but an interim "bridge" is required to reach this stage. Extending the service life of the Air National Guard's current fleet is possible, but expensive ($20 million) and would add just 1,500 hours. Instead, Congress should purchase additional fourth-generation fighters, which are relatively inexpensive, to bridge the coming gap in FY 2010.” [#51.91] In 2007 Steven Kosiak and Barry Watts published a report “Fighter Modernization Plan, near term choices” [#51.96] with a clear analysis of several options: Option 1: cancel all F-35s and procure 2443 Advanced F-16s and F/A-18 Super Hornets. Option 2: cut the planned number of 1763 F-35A and replace them by Advanced F-16s. Option 3: cancel the F-35C Carrier Variant and buy F/A-18 Super Hornets in stead Option 4: execute both option 2 and option 3 Option 4 would give annual savings of US$ 800 – US$ 1.100 million.

Now Steven Kosiak is working in the White House with Peter Orszag in the Office of Management and Budget (OMB) on Defense Issues and will have a chance to test his

Page 33: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 33 of 136

analysis on the real budget. So it may be expected that his ideas will play a role in future (financial) planning of the US Forces. Growing concerns about the US Homeland Air Sovereignty mission lead to growing pressure to purchase additional 4.5-generation fighters for the US Air National Guard as an interim bridge for the delayed F-35 and as an alternative for expensive life-extension programs [#51.127, page 10]. Thomas Ehrhardt, special assistant of the Chief of Staff ot the USAF in his latest CSBA Report “An Air Force Strategy fot the Long Haul” [#51.126] of September 2009 : “By way of example, the F-35 Lightning II – by far the Service’s most expensive modernization effort – serves as a classic “middle” capability that lacks critical performance characteristics (e.g. range) needed to meet high-end challenges, while it is over specified and overpriced for the low-end challenges.” Conclusion: there is a growing pressure to buy less expensive, less high-tech, non-stealth aircraft for other operational duties. 5.1.6.4.17 Operationeel need for more and new medium range capacity Within the US forces is a need for medium range air platform to be fielded between now and 2034. In a CSBA report of Steven Kosiak (who now has a key function within the US Department of Defence of the Obama-administration), an analysis has been given about the need to procure a medium range air combat capacity [#51.96]. Most plausible platform may be a variant of the US Navy’s UCAS-D. There is growing inbalance toward short range tactical fighters. There are plenty of arguments to restore a sufficient medium range capacity within the US Air Force and US Navy. Thomas Ehrhardt, special assistant of the Chief of Staff ot the USAF in his latest CSBA Report “An Air Force Strategy fot the Long Haul” [#51.126] of September 2009 describes the need for more medium range capacity in relationship to the development future basing options for the US Forces, changing balance of power in Asia and the need of availability of (expensive) tanker aircraft. This will require a part of the budget of tactical fighters: “This would provide 540 combat-coded F-35As on the ramp, or thirty squadrons of F-35s by 2021 in time to allow the Air Force budget to absorb other program ramp-ups like New Generation Bomber.” Conclusion: there is a growing need for long range and medium range strike aircraft within the US Forces, this will require a part of the budget of the F-35. 5.1.6.4.18 F-35 cost per flight hour more than doubled since 2002 In the US Government Accountability Office report 08-388, dated March 2008 [page 26] it states, under reference to the SARs (= Selected Acquisition Report, the US DoD annual justification for major projects): “Recently DoD sharply increased its projection of JSF operating and support costs compared to previous estimates. The December 2006 SAR projected life-cycle operating and support costs for all three variants at $ 650.3 billion, almost double the $346.7 billion amount shown in the December 2005 SAR and similar estimates. The operating cost per flying hour for the JSF CTOL is now estimated to be greater than current flying hour cost for the F-16, one of the legacy aircraft to be replaced. Officials explained that the amounts reported in 2005 and before were early estimates based on very little data, whereas the new estimate is of higher fidelity, informed by more information as JSF development progresses and more knowledge is obtained. Factors responsible for the increased cost estimate included a revised fielding and basing plan, changes in repair plans, revised costs for depot maintenance, increased fuel costs,

Page 34: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 34 of 136

increased fuel consumption, revised estimates of manpower and mission personnel, and a new estimate of the costs of the JSF’s autonomic logistics system. Overall, the cost of ownership represents a very large and continuing requirement for the life of fielded aircraft”. I will be unavoidable the less than predicted affordability of the Joint Strike Fighter will influence future procurement decisions. The projections of the US GAO in March 2008 are still based on a number of 2.443 F-35’s for the US Forces. But, lower production quantities will not only cause higher procurement prices, but also more expensive later upgrades and higher exploitation cost. A separate report, “Exploitation cost JSF, more than doubled since 2002 ”, April 2009, 44 pages, for the Dutch Parliament, Standing Committee of Defence is also available. (mail author; [email protected]).

Page 35: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 35 of 136

5.1.6.5 Signals of decreasing F-35 quantities for the US forces

5.1.6.5.1 First cut , QDR 1997: 126 aircraft deleted The numbers to be procured by the US forces have decreased since 1996 with over 500 units. In 1996 a total quantity of 2978 was mentioned, 2.036 for the US Air Force, and 942 for USMC/USN. In 1997 a total quantity of 2852 was mentioned. The May 1997 QDR reduced the procurement to 1.763 for the US Air Force and changed the number into 1.089 for the US Marine Corps and US Navy. The May 1997 QDR reduced procurement to 480 for the Navy and noted that up to 230 of the Navy's 480 JSFs could be replaced by F/A-18E/Fs, depending on the progress of the JSF program and the price of its Navy variant compared to the F/A-18E/F. The May 1997 QDR planned a procurement of 609 JSFs for the US Marine Corps. From 1999 until 2001 this total US Forces quantity of 2.852 has been used in The Netherlands (and may other countries) in the preparation of the decision to participate in the SDD phase of the JSF. Conclusion : Since the Program Start in 1996 273 US Air Force are deleted. 5.1.6.5.2 Second cut, QDR 2002: 409 aircraft deleted In April 2002 the Department of the Navy was reviewing a proposal to cut JSF production by 409 aircraft, 259 jets from the US Marine Corps F-35B buy to some 350; and 150 from the Navy F-35C purchase to a total of 330 F-35Cs. The Department of the Navy was concerned that it could not afford the number of tactical aircraft it planned to purchase and reduced the number of backup aircraft needed. Conclusion : Since the Program Start in 1996 some 262 US Navy/US Marine Corps F-35s are deleted. Since the start of the F-35 SDD in 2002 some 409 US Navy/US Marine Corps F-35s are deleted. 5.1.6.5.3 Attempt to new cuts, ACC 2004 and QDR 2006 In 2004 the Air Combat Command announces a reduction from 1.763 to 1.550 F-35s for the US Air Force. This is confirmed by the next US GAO report about the JSF. However, some partner countries are not content with the decreasing numbers and are questioning the US about it. From then, officially the number of 1.763 F-35s is maintained again in public documents. But in 2005, prior to the US Quadrennial Defense 2006 review, again a much lower requirement is mentioned. Only 2.180 F-35’s would be required. But again, this number doesn’t get an official status. However it shows the inside analysis within the Pentagon about the future requirements. The Los Angeles Times writes July 27, 2005 “some inside the Defense Department say that the deepest cuts could come from the JSF program. According to one source, the Pentagon could cut the Air Force allotment of th planes by half.” [#51.18e]. To avoid tensions with the international partners, the MOU-PSFD (Annex A) as signed by the nine JSF partner countries between November 2006 and February 2007 speaks again about the official number of 2.443 F-35’s to be procured by US Forces between Fiscal Year 2007 and Fiscal Year 2027. Conclusion: Several times lower numbers are mentioned, but for commercial and public relation reasons these lower number get no official status. 5.1.6.5.4 Shift of 515 aircraft to FY2028-2035 after partners signed MOU-PSFD 2007 The USA showed to be an unreliable business partner in the beginning of 2007. While the ink of the MOU-PSFD of November 2006 isn’t dry yet (JSF partner countries Denmark and Norway signed in January/February 2007), the US proposes to extend the procurement period from FY2027 to FY2035. Only two months after this document had been signed by the JSF partner countries, the US changes the MOU-PSFD Appendix A and is moving 515 F-35

Page 36: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 36 of 136

aircraft to a far and uncertain future, lowering their number of more expensive early birds, influencing the economy of scale of the production during the essential years 2015-2022. Moving their US requirements to a far and uncertain future, Fiscal Year 2028 to Fiscal Year 2035 was a smart, political decision. They could maintain the same “2443” quantity and find a solution for the funding problems until 2022. It influences the economy of scale, makes the early buy of allied JSF partner countries more expensive, frustrating partliament members in these countries. The average unit pric increases by this move to the future. Conclusion : The original mentioned requirement of 2.978 F-35’s for the US Forces, fundamental for the early decisions to participate in the Concept Development of the JSF in the 1996-1999 timeframe has been brought back to 2.443, including major shifts in time from early years to a far future. This has a major impact on the economy of scale of the Program. 5.1.6.5.5 Planned procurement until FY2013 decreased with 660 units In the original planning of 2001 six Low Rate Initial Production series were planned, with a total of 465 aircraft, including the first three year of Full Rate Production. Until FY2013 the US would buy around 937 F35s. Table 51.6 “Table of planned LRIP and early FRP US F-35s

TABLE planned Low Rate Initial Production and early FRP US procurements

-------------------------------------------------------------------------------------

Initial Sep Nov Apr Nov Aug

2001 2006 2006 2007 2008 2009

--------------------------------------------------------------------------------------

FY05 10 initial planned LRIP-1

FY06 22 initial planned LRIP-2

FY07 49 5 5 2 2 2 LRIP-1

FY08 82 18 16 12 12 12 LRIP-2

FY09 108 52 47 16 14 14 LRIP-3

FY10 156 70 56 30 30 30 LRIP-4

FY11 (170) 98 64 43 43 43 LRIP-5

FY12 (170) 133 103 82 82 82 LRIP-6

FY13 (170) 143 135 90 90 90 LRIP-7

------ ------ ------ ------ ------ ------

Total 937 519 426 275 273 273

Source: prepared by JOBO

However planning was changed after the delays in the SDD phase and only 5 years later the number of aircraft to be procured until FY2013 was decreased to 519. Since the quantity has been lowered year by year until only 273 units. Conclusion : since 2001 over 660 units were deleted from the JSF production planning until FY2013. And budget used in one year will not return in a next year. 5.1.6.5.6 Continuous, recent, downsizing 2007-2009: 200 aircraft deleted In the MOU-PSFD of February 2007 we can find a planned Low Rate Initial Production during FY2007 until FY2009 (LRIP-1-LRIP3) of 68 units. The LRIP-4 – LRIP-7 and first full rate production years show a production planning during FY2010 until FY2015 of 675 units for the US forces. From FY2007-FY2015 the US would buy a number of 743 units out of a total planned production of 1.027 units (72% of the total production). The FY2009 budget, presented by Mr. Robert Gates in April 2009 shows a Low Rate Initial Production during FY2007 until FY2009 (LRIP-1-LRIP3) of 28 units, 40 less than planned

Page 37: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 37 of 136

around two years before. The LRIP-4 – LRIP-7 and first full rate production years show an (unconfirmed) production planning during FY2010 until FY2015 of 513 units for the US forces. When approved by Congress, the US would buy from FY2007-FY2015 a number of 541 units out of a total planned production of 790 units (68% of the total production). Conclusion : the last 3 years over 200 units were deleted from the US procurement planning between FY2007 and FY2015. 5.1.6.5.7 More F/A-18 Super Hornet purchases means less F-35C budget Based on the currently known numbers the total production of US Navy F/A-18E/F Super Hornets and EA-18 Growlers will end in FY2011 with a total number of 546 aircraft. Since the start of the operations 13 aircraft are crashed of withdrawn, making a remaining number of 533 aircraft [#51.122 In April 2002 the Pentagon was planning a total US Navy purchase of 330 F-35Cs and limit the US Navy's F/A-18E/F acquisition to 460 aircraft, making a total of 790 future US Navy Jet Fighters. With the delayed Initial Operational Capability date of 2015 and the growing US Navy “fighter gap” some 90 more F/A-18 Super Hornets were procured than originally planned: 546 in stead of 460. On the other side, since the start of the Joint Strike Fighter program in 2001 a continuous move in numbers to future years can be seen, as shown in as shown in Table 51.5 (paragraph 5.1.6.4.4). In 2001 a number of 61 F-35Cs was planned to procure from FY2005 until FY2009, this has been changed into zero F-35Cs. Also a total number of 199 F-35Cs was planned from FY2005 until FY2013, this has been changed into only 42 F-35Cs. Within the total future US Navy Jet Fighter requirement of 790 fighters and a total of about 530 F/A-18 Super Hornets, only a requirement for 260 F-35C’s will remain. Conclusion: The requirement and the budget of the US Navy to buy the original planned number of 330 F-35C’s has become under pressure by additional Super Hornet buys [#51.15; #51.41; #51.42]. 5.1.6.5.8 Budget problems, the “110 per year” question Until the 2006 the US Forces planned an annual production of the F-35 to be 160 (110 US Air Force and 50 USMC/USN) by around 2015-2024 with the last F-35s to be procured in FY2027 (Appendix A.1 PSFD-MOU November 2006). With the presentation of the FY2008 budget, early 2007 the production was extended to FY2034 with a reduction of the maximum annual production for the F-35 to about 115 per year [#51.123]. At that time, January 2007, the US Air Force is briefing that the ramp-up for “JSF is going to plateau at 48 airplanes instead of 110”. During a meeting of US Secretary of Defense Gates and Pentagon officials [#51.18a] with the press journalists were asking for comments. Admiral Stanley doesn’t say the journalist questions is not correct, but says: “I’ll have to refer you to the Air Force”. When the journalist repeated his question, again there is no attempt to correcting the question, but they tried to move the question to someone else. The Air Force Times reports on February 24, 2007 “but instead of buying 110 of the jets annually <…> the Air Force will limit its yearly purchase to 48 of the stealthy jets’. [#51.18b]. The Air Force Association Magazine, one year later in February 2008 writes “However the USAF is also struggling to fund the F-35 fighter. It needs to build 110 per year to replace the F-16 in a timely manner, but can only afford 48 per year in its budget ”. This number of “48 per year USAF F-35A’s” is widely used, not only in reliable and professional press publications, but also by US Air Force and Pentagon officials. General

Page 38: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 38 of 136

Schwartz, as the new Chief of Staff against the Senate Armed Services Committee in July 2008: “Boosting F-35 production to as high as 110 per year from 48 is the major strategy for addressing an anticipated shortfall in fighters as the F-16 is retired”. In a publication of Eric Palmer in April 2008 he is questioning “Where is the 1763rd F-35 for the US Air Force?” [#51.17]. He gives a recalculation of the consequences of the long term restrictions in F-35 budget with a recalculation from 110 to 48 F-35A aircraft for the US Air Force until 2034 (Appendix A.4). Conclusion : since 2007 several reliable press sources and high ranked officials are confirming that a US Air Force budget is available for 48 aircraft per year, much lower than the officially used numbers. 5.1.6.5.9 Failing attempts to establish a consortium buy Since 2007 there have been negotations about a certain Level Line Price for the F-35 between the USA and the international JSF partner countries. Lockheed Martin reported in April 2008 that it had entered into negotations with several countries, after some governments expressed concerns that the cost of early-production aircraft might be higher tan later aircraft. Not only US congressional rules and a lack of interest amongst international partners have frustrated the negotations to achieve a price guarantee for the aircraft. In November 2008, during the JSF Executive Steering Board (JESB) meeting in Oslo it didn’t result in an agreement. And half a year later, during the JESB meeting it became clear that the attempts would fail. This was confirmed by an Australin Defence official on September 22, 2009 in an interview with The Australian Financial Review [#51.130]. Conclusion: Delay in testing, delay in early production, delay of political decisions in several countries, US congressional rules to get a Multi Year Buy before succesfull end of the Initial Test & Evaluation stage, the uncertainty about a real (fixed) price and the wish to keep “all options” open, also within the Pentagon, have played a role in the failed attempts to establish a consortium buy. Figure 51.E “Consortium Buy proposal 2008”

Source: Lockheed Martin 2008, distribution unlimited

Page 39: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 39 of 136

5.1.6.5.10 The JSF engine debate as a signal of lower quantities than predicted It would be outside the focus of this report to discuss the alternate General Electric/Rolls Royce F136 engine of the F-35 Lightning II. However in the ongoing discussion between Pentagon and US Congress and in all press publications about the F135 versus F136 engine debate one element is missing as a possible cause. Without any doubt, in the original planning of the development and production of the F-35 the second engine played an important role. Not only in the USA, but also in several countries a lot of money was spend in the development of the second engine. In 2000-2002, and also later, several calculations suggested a 60%-40% ration between the numbers of Pratt & Whitney F135 and GE/RR F136 engines. Based on the suggested number of 5.000 – 6.000 F-35’s there would be a requirement for 3.000 – 3.600 P&W F135 engines and 2.000 – 2.400 GE/RR F136 engines. In other words: for each engine there would be sufficient economy of scale. So, why cancel one of the engines. In the debate the threatening with a Veto by the Administration Obama is quite unusual. What may be the deepest reason? In my opinion, it is because behind the screens, many are knowing already that with much lower F-35 quantities to be manufactured it will be difficult to achieve sufficient economy of scale. With a total production of 2.500 F-35’s there would be a market of around 1.800 P&W F135 engines and 700 GE/RR F136 engines. This would have an upward effect on the costprice. Conclusion: In my opinion the ongoing engine debate can be considered as a signal for much lower F-35s to be produced than predicted. 5.1.6.5.11 CSBA analysis August 2009 “F-35 may be flying into budget storm” On August 12, 2009, the private Center for Strategic and Budgetary Assessments, several of whose one-time experts are now serving in senior Obama administration jobs, released an analysis of the Fiscal Year 2010 budget, and cited the F-35 as just one example of programs ripe for review. Their advice: “Rather than buying both new long-range bombers and thousands of short-range F-35 fighters, DoD might consider whether the new bombers <..> could represent a cost-effective substitute for some number of these new fighters. Adding, that the use of unmanned systems "could enable a radically different force structure that achieves the same level of effectiveness at a much lower cost" [ #51.18d]. Conclusion : influencal advisors of the Obama administration suggest more cost-effective substitutes of the F-35 are available. 5.1.6.5.12 Scaling back Italian FACO signal of budget pressure and lower numbers The discussion about “scaling back” the Final Assembly and CheckOut (FACO) facility is a possible sign of expected lower quantities in the international market. Within the expectation of the original sales quantities a second assembly line (FACO) in Italy would ne necessary and profitable. But when lower numbers are expected within the US Forces and within the international market there is (1) no need for a high additional production capacity outside the Fort Worth plant and (2) it may be more difficult to make a second FACO profitable. As reported by Amy Butler in Aviation Week in September 2009: “The Italian government and Alenia Aeronautica are in negotiations on how to finance the domestic F-35 final assembly and checkout (FACO) facility in light of fiscal belt-tightening brought on by the global recession. Shifts in the approach could include opting against a more sophisticated moving assembly line, which would replicate the main final assembly plant at Lockheed Martin’s Fort Worth, Texas, facility. <…..> Underlying the discussion is the question of value for the Italian industry, given economic pressures that could prompt the purchase of fewer aircraft or trim back the configuration of the FACO facility.” [#51.128]. To the press, the Italian JSF partner Alenia CEO Mr. Giovanni Bertolone said “Theoretically, the global level of industrial return [for F-35 development partners] is quite high, but we are looking [for once] as anglo-saxons, we want to be pragmatic. We are not looking to the

Page 40: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 40 of 136

theoretical numbers. The final cost is related to the severity of the requirements” and "The way to make it affordable in the proposal is to work on the requirements in order to be essential and not to have something that is nice to have." In a RAND report “Assembling and Supporting the JSF in the UK, issues and costs”, prepared for the UK’s Ministry of Defence in 2003 it was made clear that a second FACO will generate enough profit only with sufficient numbers [See RAND report, #51.111]. Conclusion : The scaling down of a second assembly line in Italy is a refelection of the lower numbers expected within the US Forces and within the international market, it shows there is no need for additional production capacity. 5.1.6.5.13 Advisor close to Chief of Staff of the USAF: “reduce F-35A’s by just over half” Colonel Thomas P. Ehrhard, who served as a senior fellow of the Center for Strategic and Budgetary Assessments (CSBA) from April 2006 to July 2009 and now a special assistant of the Chief of Staff of the US Air Force General Schwartz published in September 2009 an analysis of the US Air Force, titled “An Air Force Strategy for the Long Haul” [#51.126]. In the past Colonel Ehrhard worked as a division chief ot the US Air Force QDR 2001 staff. At this moment Dr. Ehrhard serves as a special advisior, his ideas may be influencal in the outlining the new Quadrennial Defence Report 2010 and new FY2011 budget changes. His publication is showing the most actual ideas within the Pentagon and the Obama-administration: “On the other hand, there is a strong case for reducing the total F-35A procurement. The Air Force should consider cutting its planned buy to free up resources for other high-priority requirements. Reducing the Air Force plan to buy 1.763 F-35As thr ough 2034 by just over half, to 858 F-35As , and increasing the procurement rate to end in 2020 would be a prudent alternative. This would provide 540 combat-coded F-35As on the ramp, or thirty squadrons of F-35s by 2021 in time to allow the Air Force budget to absorb other program ramp-ups like New Generation Bomber.” He knows that cancelling is not an option, but reduction is necessary (page 88): “Although the case for reducing the total F-35A procurement has strong strategic logic, because of the multiservice and multinational aspects of the F-35 program, cancelling the entire program is not a viable option.” He sees the F-35 as a major budget risk: “Still, it represents an opportunity cost that poses the single greatest threat to the future Air Force’s strategic viability, and risks bleeding the Air Force white over the next twenty years.” Conclusion : Where these ideas recently are published by a senior advisor ot the Chief of Staff of the US Air Force there is a major chance they will be reflected in future procurement planning.

Page 41: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 41 of 136

5.1.7 Jet fighter requirements of current JSF part ner countries 5.1.7.0 Overview Table 51.7 - JSF Market 2008-2034 Partner Countries

Source: prepared by JOBO 5.1.7.1 Australia 5.1.7.1.1 Background Australia was the latest partner in the JSF Program. The Australian armed forces had been looking since 2000 for a replacement of the fleet of 71 F-18 Hornets (in use since the mid-80s) and 36 F-111 medium strike and reconnaissance aircraft (Project Air 6000). Australian had been considering several options, including studying a Saab solution of a network centric solution of combined Gripen and Unmanned Aerial Vehicles [#51.63]. In June 2002 the Government they had chosen to participate in the JSF Program. The F-18 was planned to withdrawn from service from 2012 to 2015 and the F-111 was to follow from 2015 to 2020. 5.1.7.1.2 Current jet fighter fleet (August 2009) 55x Boeing F/A-18A (to be retired in 2018) 16x Boeing F/A-18B Hornet (to be retired in 2018) 24x Boeing F/A-18F Super Hornet on order, delivery from March 2010 until 2011 21x General Dynamics F-111 to be retired in 2010

5.1.7.1.3 Opportunities Joint Strike Fighter Australia has a Partnership Level 3 participation without an investment in the CDP funding and US$ 150 million SDD funding. Primary reasons for participation were (1) to facilitate Australian industrial participation in the JSF program; (2) to evaluate JSF as a potential candidate for the Australian Forces.

Page 42: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 42 of 136

The original intention was that the F-35 would replace Australia's fleet of 36 F-111 and 70 F/A-18 Hornets from 2012, but the delay in the development of the F-35 the Government decided to buy 24 F-18F Super Hornet Block II as a stop-gap with a total budget of US$ 4.8 billion all-in for a 10 year period. First the F-111 will be retired, and by a life-extension program the classic F-18s will be in service until 2018 [#51.36, #51.37, #51.43]. The delivery of the F-35 is expected to be delayed until about 2015. The F-35 was chosen because it will be able to fulfil a dual role now performed by the F-111s and F/A-18s. Total budget for the procurement of 100 F-35’s had been budgeted at some US$ 15-16 billion [#51.81]. Under the Defence Capabilty plan 2009 (released July 2009) the Australian JSF Plan Phase 2a/2b there will be a buy of 72 F-35 fighters for three operational squadrons and a training unit with a slip of Initial Operational Capability to 2017-2019, five years later than planned. Later a decision will be taken about Phase 2c to replace the brandnew F/A-18 Super Hornets, with a potentital operational lifetime of 30 years, which are delivered in 2010-2011 [#51.106]. This makes it quite uncertain whether the original number of 100 JSF’s will be procured, also in long term. Within the current planning the RAAF is looking at acquiring its first two aircraft in 2014 for Operational Test purposes in the USA. Later those aircraft will become part of RAAFs operational fleet. Subsequent aircraft will be acquired to conduct dedicated Operational Test in Australia.

Table 51.8 – Official planning F-35 procurement Aus tralia The table shows the official changes in the procurement quantity and schedule.

PSFD-MOU PSFD-MOU JSEB MoD/DMO january 2007 april 2007 nov08 Sep 2009 ==========================================

FY10 2 FY11 6 4 4 FY12 14 8 8 2 FY13 15 15 15 FY14 15 15 15 10 FY15 15 15 15 15 FY16 15 15 15 15 FY17 15 15 15 15 FY18 3 13 13 15 ------- ------- ------- ------- Total 100 100 100 72 Source: prepared by Jobo

Page 43: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 43 of 136

5.1.7.2 Canada 5.1.7.2.1 Background From 1982-1988 Canada bought 128 CF-18 Hornets and after some accidents in 2002 a total of 122 CF-18A and CF-18B Hornets were still in service, purchased between 1982 and1988. With a planned, retirement between 2017-2020. The current situation is that (after some retirements) only 103 CF-18A and CF-18B aircraft are operational, with only 80 of 103 having had upgrades. 5.1.7.2.2 Current jet fighter fleet (August 2009) 72x Boeing F/A18A Hornet 31x Boeing F/A18B Hornet 5.1.7.2.3 Opportunities Joint Strike Fighter Canada has a Partnership Level 3 participation with a US$ 10 million investment in the CDP funding and US$ 100 million SDD funding. Primary reasons for participation were (1) to facilitate Canadian industrial participation in the JSF program; (2) to evaluate JSF a potential candidate for the Canadian Forces; (3) to promote interoperability between US, British and Canadian militaries; (4) to gain understanding of the US procurement methodologies and best practices. Originally the Canadian forces had a requirement of 80 aircraft, but in Spring 2008 the Canadian Parliament adjusted this to a lower number of 65 F-35s [#51.34]; in Augustus 2008 in Canada a fighter buy was mentioned of only 60 units [#51.46]. The fighter replacement project is part of the current government’s 20-year plan for the Canadian Forces. Under consideration is a shift toward more UAVs, and some critics point at the significant cost and uncertainties of the F-35 JSF. The Ottawa Citizen (22-august-2009) confirms the government decision to buy only 65 aircraft. Canadadian government wants to make its decision over the next 12 months. Meanwhile, officials from Boeing (F/A-18 E/F Super Hornet) and Gripen International (JAS-39NG) are saying their companies are competing for Canada’s fighter replacement. The table shows the official changes in the procurement quantity and schedule. Table 51.9 - Official planning F-35 procurement Can ada

PSFD-MOU PSFD-MOU Government Nov. 2006 April 2007 August 2009 ================================

FY14 10 16 16 FY15 10 16 16 FY16 10 16 16 FY17 10 16 16 FY18 10 16 1 FY19 10 FY20 10 FY21 10 ------ ------ ------ Total 80 80 65 Source: prepared by Jobo

Page 44: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 44 of 136

5.1.7.3 Denmark 5.1.7.3.1 Background In 2002 a total of 57 F-16AM and F-16BM (MLU updated) were in service, purchased between 1979-1987. With a planned, retirement between 2013-2015. Denmark has a Partnership Level 3 participation with a US$ 10 million investment in the CDP funding and US$ 125 million SDD funding. Primary reasons for participation were (1) to evaluate JSF as the prime canditdate for F-16 replacement within the Royal Danish Air Force; (2) to support the Danish defense industry; (3) to gain understanding of the F-35 platform and program. 5.1.7.3.2 Current jet fighter fleet (August 2009) 49x Lockheed Martin F-16AM 13x Lockheed Martin F-16BM 5.1.7.3.3 Opportunities Joint Strike Fighter In Denmark is the F-35 the first option in the replacement of the F-16. Formally Denmark is investigating alternatives to the F-35 Joint Strike Fighter to replace their F-16s. In August 2005 Denmark released a RFI for the replacement of the F-16 to several manufacturers. Eurofighter left the competition at the end of 2007, stating that there was no real level playing field and independent view of the Danish Airforce. Saab continued to be in the competition as a second option with the Saab Gripen NG. In August 2008 Boeing joined the competition with the delivery of a proposal for 48 F/A-18E/F Super Hornets to Denmark, touting “a good balance of capability, cost and risk. The formal requirement is 48 F-35As, but there are budget constraints and quantities of 24 and 36 also have circulated within the Danish Ministry of Defence. Table 51.10 - Official planning F-35 procurement De nmark

PSFD-MOU PSFD-MOU JSEB january 2007 april 2007 nov 2008 =============================

FY14 8 8 8 FY15 8 8 8 FY16 8 8 8 FY17 8 8 8 FY18 8 8 8 FY19 8 8 8 ----- ----- ----- Total 48 48 48 Source: prepared by Jobo Also an end-life update and a later in-service date are considered. In October 2009 the government will take a decision about the next step [Sources #51.25, #51.28, #51.29, #51.30].

Page 45: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 45 of 136

5.1.7.4 Italy 5.1.7.4.1 Background In 2002 the total jet fighter fleet of Italy consisted of 203 medium and 110 light AMX fighters with a planned replacement by around 280 new fighters (121 Eurofighters, 160 JSFs). So, in 2002 the planned tactical fighter replacement in Italy consisted of two elements, similar to the United Kingdom. The total of 85 F-104S Starfighter air superiority fighters (in service since 1969) would be retired in 2004 and replaced by a temporary lease between 2004 and 2010 of F-16A and F-16B fighters until the arrival of the Eurofighter Typhoon. The Tornado ADV (leased from UK until 2007) would also be replaced by the Eurofighter Typhoon. Delivery of the Typhoon was planned from 2003-2015. Replacement of the 100 Tornado IDS/ECR in the ground attack and electronic reconnaissance role was planned in 2020 with F-35As. Replacement of the 110 AMX-A’s in the ground attack role was planned around 2012 with F-35As. Replacement of the 18 Navy AV-8B Harriers in the Naval Fleet Defence role was planned in 2012 by F-35Bs. Delivery of the F-35 was originally planned from 2012-2020. 5.1.7.4.2 Current jet fighter fleet (August 2009) Airforce AMX 60x AMX Ghibli AMX-A light attack aircraft Form 1989-1998 110 AMX-A were delivered. Most of these aircraft are retired already. Only 43 single seat (and 12 dualseat AMX-T) will have an ACOL upgrade to remain in service until 2015 [#51.69]. Airforce Tornado 18x Panavia Tornado ECR 67x Panavia Tornado IDS From100 in service since 1982; last will be retired in 2020. Airforce Typhoon 18x Eurofighter Typhoon single seat, with 88 more ordered, total 106 9x Eurofighter Typhoon dual seat, with 6 more ordered, total 15 The first Tranche 1 aircraft entered service in 2004. From 2009 until 2015 the Tranche 2 aircraft will be deliverd and in June 2009 the Tranche 3A contract has been signed for 21 aircraft to be delivered after 2013. The last batch will be Tranche 3B aircraft (AESA radar) with a contract to be signed at the end of 2011 and delivery in 2016-2017 [#51.107]. Airforce Lockheed Martin F-16 26x Lockheed Martin F-16A (and 3 more stored; leased until 2010) 4x Lockheed Martin F-16B (leased until 2010) Italian Navy AV-8 15x McDonnel Douglas AV-8B Harrier II (from 1981) 2x McDonnel Douglas TAV-8B Harrier II (from 1981) 5.1.7.4.3 Opportunities Joint Strike Fighter Among all international partners Italy is one of the most committed partners. Italy has decided in principle to replace the Tornado, AMX aircraft by F-35As and the Harrier aircraft by F-35Bs. The original requirement was defined as 160 JSFs, but in June 2003 the number was decreased to 150 JSFs. In 2007 when the MOU-PSFD was signed the official requirement was 109 F-35As and 22 F-35Bs, making a total of 131 JSFs.

Page 46: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 46 of 136

Italy has a Partnership Level 2 participation with a US$ 10 million investment in the CDP funding and US$ 1,028 billion SDD funding. Primary reasons for participation were (1) to evaluate JSF as the prime canditdate for Tornado IDS/ECR; AMX and Harrier replacement within the Italian Air Force; (2) to facilitate the Italian aerospace and defense industry. Remarkably the ratio between F-35A’s and F-35B’s changed in 2008. New schedules show a buy of 38 F-35A’s, followed and partly overlapped by a buy of 57 F-35B STOVL versions, and then again a buy of 36 F-35A CTOL versions (see Appendix A.6). However, this changed ratio with more F-35B’s would cause a higher budget pressure due to the higher price of the F-35B. In March 2009 the government asked the persmission of the Parliament for a non-binding plan of 22 Navy F-35B’s, 69 Airforce F-35A’s and 40 Airforce F-35B’s with a total budget requirement of € 12,9 billion (US$ 18,8 billion) for aircraft, cost of equipmtent for 4 airbases and 1 aircraft carrier, to be paid from 2010 to 2016. An ealier plan to sign the MOU-IOT&E (in 2008) has been cancellend for budget reasons. However the total number to procured is under pressure and will be dependent on (fixed) price, delivery schedule. The procurement of the F-35A and Eurofighter are intermeshed, because Italy is an important partner in the production of both jet fighters. Table 51.11 - Official planning F-35 procurement It aly

SDD start PSFD_MOU PSFD-MOU JSEB 2002 January 2007 april 2007 nov. 2008 =========================================

FY10 6 FY11 12 FY12 12 6 6 6 FY13 20 6 6 6 FY14 20 14 14 14 FY15 20 14 14 14 FY16 20 14 14 14 FY17 20 14 14 14 FY18 20 14 14 14 FY19 10 12 12 12 FY20 12 12 12 FY21 12 12 12 FY22 12 12 12 FY23 1 1 1 ------- ------- ------- ------- Total 160 131 131 131 Source: prepared by Jobo 5.1.7.4.4 Indications of declining Italian numbers (a) From 313 aircraft in 2003 to over 300 aircraft in 2020 unrealistic When all “options” would come into effect the Italy would have a fleet of 121 Eurofighter Typhoons and 131 F-35 JSFs and a number of Unmanned Aerial Vehicles, a total fleet of about 300 units in 2020 to replace the fleet of of 203 medium and 110 light (AMX) jet fighters. With the current budget situation this seems not realistic. (b) Typhoon, F-35 and UCAV programs intermeshed With the current planning in 2020 the tactical fighter fleet of Italy will consist of 121 Typhoons (Tranche 1, 2, 3A) and 131 F-35 JSFs and UCAVs. But to fill the replacement requirements the next decade, decisions has still to be taken (no firm decision about the F-35 has been taken already).

Page 47: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 47 of 136

Italy will have several options, some excluding other options: - Procurement of more Tranche 3B Eurofighter Typhoons - Procurement of more or less F-35 JSFs - Procurement of Unmanned Aerial Vehicle to replace the Tornado in the Recce role. - Close squadrons

Budget restrictions make the possibility of executing all options impossible, when the F-35 will be delayed or when the F-35 will not offer sufficient industrial benefits, other options are open to Italy. (c) A more than one-by-one replacement Navy not likely With the current exploitation cost budget of 17 Harriers and with the fast rising price of the F-35B, it will be difficult to replace 17 Harriers by more (22) F-35Bs. A new role of F-35Bs within the Italian Air Force would require new concepts of operations within the Air Force. (d) Workshare and F136 engine cancellation Typhoon and F-35 are complimentary capabilities. The Typhoon being a replacement of the Air-Defence aircraft. The F-35 would assume the ground attack roles of the Tornado and AMX. But with the latest Typhoons, having developed multi-role capabilities, the workshare to be given to the Italian industry will play a growing role. When the number of F-35s to be manufactured will decline worldwide it will impact the econmy of scale of the Italian FACO facility and the benefits for the Italian defense industry. Also when the F136 engine will be cancelled (with a 5% risk participation of Italian industry), Italy may opt for a larger number of Typhoons to safeguard and maximise the workshare of the own industry. (e) Rising cost will reduce numbers due to (structural) budget restrictions The Italian FY2009 Defense proposal showed a budget down 6.9 percent to € 14.34 billion euros ($18.48 billion), with maintenance and operations spending down 29 percent and investment - which includes procurement - down 20.6 percent to € 2.89 billion. A structural Deficit, due to too high spending of the armed forces was signalled of about € 2 billion. [#51.129]. Also Alenia CEO Giovanni Bertoleone recently hinted about concerns over rising cost pressures in the programme: “Italy remains committed to the F-35 programme, but the government's fiscal resources are strained by the global economic crisis”. [#51.128]. (f) JSF funding would be reduced because of spending cuts (2009) On April 8, 2009 the House defence committee gave a favorable opinion for the procurement of JSF’s, followed on April 18, 2009 by the Senate defence committee. Since then, however, there have been informal declarations, and hints, that JSF funding would be reduced because of spending cuts due to the recession. There are reports that Italy could reduce JSF to two land bases (for air force) since it would have to buy all Tranche 3 Eurofighters because of contractual obligations. (g) Cancelled particiation IOT&E for budget reasons Participation of the Initial Operational Evalutation Phase in the USA has been cancelled in 2008 [See #51.40] (h) Scaling back the Italian FACO due to budget pressure and lower numbers The discussion about “scaling back” the Final Assembly and CheckOut (FACO) facility is a possible sign of expected lower quantities in Italy and in the international market. When there would be the expectation of high sales quantities a FACO would generate profit. But with lower numbers it may be more difficult. As reported by Amy Butler in Aviation Week in September 2009: “The Italian government and Alenia Aeronautica are in negotiations on

how to finance the domestic F-35 FACO facility in light of fiscal belt-tightening brought on

by the global recession. <…..> Underlying the discussion is the question of value for the

Italian industry, given economic pressures that could prompt the purchase of fewer

aircraft or trim back the configuration of the FACO facility.” [#51.128].

Page 48: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 48 of 136

5.1.7.5 The Netherlands 5.1.7.5.1 Background In 2002 a total of 137 F-16AM and F-16BM (MLU updated) were in service, from 213 originally purchased between 1979-1990. With a suggested, but at that moment not yet decided, retirement between 2010-2015. From 1997 Dutch Airforce was involved in the F-35 project. After the unwanted demise of Fokker Aircraft (where F-16 were built in license) an attempt was done to reviving a Dutch “Aviation Industry Cluster” around the Fokker heritage (Fokker-Stork, Dutch Aero). To avoid political problems an official evaluation was done with as candidates for the replacement the Dassault Rafale, Lockheed Martin's Advance F-16 Block 52/60, the Eurofighter Typhoon, the Saab JAS39C/D Gripen and JSF (X32 or X35). The outcome was a victory for the Joint Strike Fighter. After 2002 the F-35A can be considered as the defacto choice of the Royal Netherlands Airforce. 5.1.7.5.2 Current jet fighter fleet (August 2009) 72x Lockheed Martin F-16AM 14x Lockheed Martin F-16BM 5.1.7.5.3 Opportunities Joint Strike Fighter The Netherlands has a Partnership Level 2 participation with a US$ 10 million investment in the CDP funding and US$ 800 million SDD funding. Primary reasons for participation were (1) to use the JSF as the military aircraft platform of which the Dutch aerospace industry would be technically based for the future; (2) to evaluate JSF as a potential F-16 replacement for the Royal Netherlands Air Force. Table 51.12 - F-35 official planning F-35 procureme nt The Netherlands

PSFD-MOU PSFD-MOU JSEB january 2007 april 2007 nov.2008 ==============================

FY09 1 1 1 FY10 2 1 1 FY11 0 0 0 FY12 6 6 2 FY13 10 10 4 FY14 12 10 9 FY15 12 12 10 FY16 12 12 10 FY17 12 12 10 FY18 18 12 10 FY19 0 9 10 FY20 0 0 10 FY21 0 0 8 FY22 0 0 0 FY23 0 0 0 ----- ----- ----- Total 85 85 85 Source: prepared by Jobo After the signing of the MOU-SDD in 2002 the F-35 may be considered as the defacto choice of the Dutch Air Force. However budget constraints have lead to a “Batch 1” and “Batch 2” approach with only sufficient budget to procure a first batch of 57 aircraft. The second batch is higly uncertain.

Page 49: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 49 of 136

In early 2008, a proposal to buy two F-35A test aircraft for participation in the Initial Test and Evaluation (IOT&E) was conditionally approved by the Dutch Parliament. A next step was in 2008 a new evaluation has been done between several fighter candidates. Dassault and Eurofighter refused to participate, indicating there was no real “level playing field”. Saab participated with the Gripen New Generation. The outcome in December 2008 confirmed the defacto choice of the F-35A. However in April 2009 it was decided to buy just one LRIP-3 test aircraft, to reconsider the buy of the next (LRIP-4) test aircraft in 2010 and to postpone the final decision to 2012 after the next elections. In 2012 a new Government and Parliament will review the whole process again. Opposition to the F-35 is growing ever stronger, based on ever rising costs, unknown pricelevel, noise issues around the airbases, slips in the schedule, complaints about industrial orders.

Page 50: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 50 of 136

5.1.7.6 Norway 5.1.7.6.1 Background In 2002 a total of 58 F-16AM and F-16BM (MLU updated), purchased between 1980-1987 were in service, with a planned retirement between 2012-2015. 5.1.7.6.2 Current jet fighter fleet (August 2009) 47x Lockheed Martin F-16AM 10x Lockheed Martin F-16BM 5.1.7.6.3 Opportunities Joint Strike Fighter Norway has a Partnership Level 3 participation with a US$ 10 million investment in the CDP funding and US$ 125 million SDD funding. Primary reasons for participation were (1) to facilitate Norwegian industrial participation in the JSF program; (2) to evaluate JSF as a potential Norwegian Air Force purchase. In November 2008 the Norwegian Government announced that the F-35A would be the First choice of the Norwegian Air Force. The Parliament has given approval to negotiate about a maximum number of 56 F-35As with final decisions to be taken in 2012, based on clear guarantees of delivery schedule, fixed price and sufficient offset orders for the industry [#51.32]. Signing of a contract cannot be expected until 2012. The table shows a stabil official Norwegian procurement quantity and schedule. Table 51.13 - F-35 official planning F-35 procureme nt Norway Year PSFD-MOU PSFD-MOU JSEB

Nov. 2006 April 2007 Nov. 2008 ==============================

FY14 8 8 8 FY15 12 12 12 FY16 12 12 12 FY17 12 12 12 FY18 4 4 4 ----- ----- ----- Total 48 48 48 Source: prepared by Jobo

Page 51: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 51 of 136

5.1.7.7 Turkey 5.1.7.7.1 Background In 2003 Turkey had a fighterl fleet of of over 160 F-4 Phantoms (interceptors, attack); 200 Northrop F-5s and 166 Lockheed Martin F-16. Retirement of F-4s and F-5s was planned between 2005 and 2010 by new F-16s and F-35s. The Turkish Air Force is planning to replace its fleet of McDonnel Douglas F-4 Phantom, Nothrop F-5 and F-16 Block 30 with the F-35A between 2014 amd 2023. 5.1.7.7.2 Current jet fighter fleet (August 2009) 163x McDonnel-Douglas F/RF-4E Phantom II 50x Norhtrop F-5A/B 38x Norhtrop NF-5B 176x Lockheed Martin F-16C (14 more ordered) 41x Lockheed Martin F-16D (16 more ordered) 5.1.7.8.3 Opportunities Joint Strike Fighter To ensure a timely transition Turkey decided to join the JSF SDD program with a Partnership Level 3 participation with a US$ 6,2 million investment in the CDP funding and US$ 175 million SDD funding. Primary reasons for participation were (1) to facilitate Turkish industrial participation in the JSF program with expected high revenues, job creation, aerospace industry development and technological spin-offs; (2) to evaluate JSF as a potential Turkish Air Force purchase to replace aging F-4, F-5 and F-16 Block 30s. In a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of 100 – 150 Turkish F-35As was mentioned. In 2008 Turkey got parliamentary approval to start negotations about the purchase of 100 F-35As. The time schedule may change, but with the heavily involved industry a substantial order has to be expected as near certain [#51.33]. The table shows a stabil official Turkish procurement quantity and schedule. Table 51.14 - F-35 official planning F-35 procureme nt Turkey Year PSFD-MOU PSFD-MOU JSEB

Nov. 2006 April 2007 Nov. 2008 ==============================

FY12 10 10 10 FY13 10 10 10 FY14 10 10 10 FY15 12 12 12 FY16 12 12 12 FY17 10 10 10 FY18 10 10 10 FY19 10 10 10 FY20 10 10 10 FY21 6 6 6 ------- -------- ------- Total 100 100 100 Source: prepared by Jobo However, also Turkey seems to get its own “fighter gap” as it disbanded its first squadron of McDonnell Douglas F-4E Phantom strike aircraft in May 2009, officially under a transition plan leading to its future operation of Lockheed Martin's F-35 Joint Strike Fighter. However Turkey expects to receive its first two F-35s in 2014, although these will first be used at a training centre in the USA. This is already a delay in the original schedule of ordering 10 aircraft in FY2012 with delivery in 2014. The first F-35As should arrive in Turkey in 2015. [#51.115].

Page 52: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 52 of 136

5.1.7.8 United Kingdom 5.1.7.8.1 Background In 2001 the planned tactical fighter fleet replacement in the United Kingdom included the Eurofighter Typhoon and the Lockheed Martin F-35 JSF. A total of 230 Eurofighter Typhoons would be the proposed replacement of the 224 Tornado F3/GR4 (in service since 1980-1990) and the 52 Jaguar GR3 (in service from 1973) with a planned entry to service (IOC) of the Typhoon in 2003. A total of maximum 150 F-35 JSFs would be the proposed replacement of the Harrier GR7/9/T10 (in service since 1990-1993) of the 96 Royal Air Force and Sea Harrier FA2 of the Royal Navy; with a planned entry to service (IOC) in 2012. The UK planned buy was 150 aircraft. (Report Industrial Participation JPO june 2003. The total fleet of tactical fighters in 2003 included 372 aircraft to be replaced by 230 Eurofighter Typhoons and some 150 F-35 JSFs, when calculated at a fictive one-for-one basis. In 2007 the Royal Air Force had “replaced” eight frontline squadrons (four Tornado squadrons, three Jaguar squadrons and a Harrier squadron) with only two new Typhoon frontline squadrons (No. 3 & No. 11 squadron). 5.1.7.8.2 Current jet fighter fleet (August 2009) Harrier At this moment some 65 Harrier GR7/GR9 and 9 Harrier T10/T12 are in use. Their maximum service date is 2018; however exact dates of retirement are yet undecided. Tornado In 2007 the Royal Air Force had just five Tornado GR.4 squadrons compared to eleven in 1996. Until the new Typhoons were deliverd to No. 3 squadron, the air defence of the UK (including The Falklands, etc.) was in the hands of just about 60 Tornado F.3's, of the 165 airdefence fighters a decade before. A total number of 61 Tornado F3 air superiority fighters is in service, being replaced by Typhoons. The Tornado F3 will be retired in 2015. In the ground attack role 129 Tornado GR4/GR4A (IDS) are in service. In 2008 a service extension has been proposed from 2018 until 2020 [#51.75]. The Tornado GR4/GR4A is being replaced by Typhoons. A Mid-Life Fatigue Programme (MLFP) contract was issued 25-aug-2009 which is aimed at life extension of 80 Tornado’s until 2018-2020 and seeing a certain number (40-50) of the Tornado fleet, in the ECR and Recce role through to its planned Out-of-Service Date (OSD) in 2025. [#51.79, p.33]. (UK MoD 25-aug-2009 pressbulletin). Typhoon At his moment some 50 Eurofighter Typhoons are in service, most of Tranche 1. The Tranche 2 production batch consists of 91 Typhoons and delivery will be completed in 2015. Recently the Tranche 3A contract has been finalized (40 Typhoons, starting delivery in 2013). The next Tranche 3B (48 Typhoons with AESA radar and conformal tanks plumbing) contract has to be finalized at the end of 2011 with delivery in 2016-2017; however there is a risk of cancellation [#51.107]. Like Air Commodore Chris Bushell, head of the UK’s Typhoon acquisition team told the press on 20-aug-2009: “By ordering 40 more aircraft costing about £3 billion ($4.9 billion) in Tranche 3A, the UK will exhaust the remaining funds under this ceiling and therefore our obligations under the MoU have been met” The Typhoon partner nations have agreed that the UK can count 24 of the Saudi aircraft as part of its production commitment. These aircraft are being diverted from the UK’s order for Tranche 2, awarded in December 2004. So the RAF will therefore eventually receive 160 to 208 Typhoons, down from the 232 originally envisioned [#51.110].

Page 53: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 53 of 136

5.1.7.8.3 Opportunities Joint Strike Fighter The UK has a Partnership Level I participation with a US$ 200 million investment in the CDP funding and US$ 2.056 million SDD funding. Primary reasons for participation were (1) to achieve operational requirements of RAF and Royal Navy; (2) to achieve operational commonality with the United States forces; (3) to achieve an affordable Air System through economies of scale. The total number of F-35 JSFs to be procured by the United Kingdom is highly uncertain. The original number of 150 has been lowered to a planned number of 138 in official documents of the JSF Program Office. However there are strong indications this number will be much lower. In 2001 a total number of 150 units was proposed with IOC in 2012. Early 2007 a major shift could be seen, 12 units less and 4 years later. The current situation shows a new major shift of units: early birds three years later; final decision postponed until 2013-2014 and a main batch of 48 units moved for delivery during 2026-2029. In 2004 the Initial Operational Capability date slipped from 2010 to 2012 after the weight issues. Later the UK MoD decided a further slippage to December 2014, to avoid less capable Block 2 aircraft. And after fierce discussion about the buy of the first instrumented aircraft a final decision will be taken in 2013 with a further delay in IOC, up to 2016-2017 as a consequence. The table shows the official changes in the British procurement quantity and schedule. The first column is confirmed in a RAND report (2003) about a possible assembly line in UK [#51.111]. Table 51.15 - F-35 official planning F-35 procureme nt United Kingdom Year SDD-MOU PSFD-MOU PSFD-MOU

Nov 2001 Nov. 2006 April 2007 ========================================== FY07 5 Initial LRIP-3 (plan 2001) FY08 9 Initial LRIP-4 (plan 2001) FY09 12 2 2 Definitely LRIP-3 FY10 12 3 1 Definitely LRIP-4 FY12 12 8 0 LRIP-5 FY12 12 3 6 LRIP-6 FY13 12 2 1 LRIP-7 FY14 12 9 8 LRIP-8 FY15 12 9 11 FY16 12 12 12 FY17 12 12 13 FY18 12 12 12 FY19 12 12 12 FY20 4 12 7 FY21 12 2 FY22 12 1 FY23 12 1 FY24 6 12 FY25 0 13 FY26 0 13 FY27 0 11 FY28 0 0 ------- -------- -------- Total 150 138 138 Source: prepared by Jobo

Page 54: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 54 of 136

5.1.7.8.4 Indications of declining UK numbers (a) Continuous press report from leaks within MoD Since long press reports call for a lower number. In April 2003 UK press reports said that the order was likely to be cut to 110, and in February 2004 the American magazine Aviation Week suggested that as few as 80-85 JSF's might be bought by the UK. The Airforce Monthly published in March 2009 [#51.79] (Royal Air Force. Under Pressure; author Jon Lake): “To date, 66 serials have been allocated (though some expected a larger number, up to 150) to meet the requirement for a Harrier replacement that would serve aboard the CVF aircraft carriers. But with the price of the JSF rising inexorably, and with concerns as to what capabilities will be incorporated, some belief that both carrier and JSF should be cancelled.” And in AirForce Monthly of May 2009 we could read: “The joint RAF/RN requirement is tentatively set at 138 aircraft, but is also subject to confirmation when a purchase decision is made around 2013. Service entry is currently targeted for around 2017.” [#51.80 p.4]. And in a detailed analysis of the pros and contras of an UK Carrier Fleet in well informed Air Force Monthly of May 2009: “Though the UK has now ordered the first three of its planned force of F-35B’s (now believed ti number just 66 aircraft), …, the programme remains mired in controversy” [#51.80, p. 32]. (b) Defence Committee questions The British number is very uncertain and it depends on price as made clear during the Oral Evidence, taken before the United Kingdom Defence Committee on Tuesday 29 January 2008. Chairman Mr. James Arbuthnot asked General Sir Kevin O’Donoghue KCB CBE, Chief of Defense Materiel (see #51.48) about the estimated number of F-35s and got no clear answer, than a little bit irritated: “That is cloud cuckoo land, is it not?”. And the answer of General Sir Kevin O’Donoghue: “We do not need to make a decision on that. Because the production line will run on, we can buy 36 to man one aircraft carrier plus the training aircraft and so on and buy others as and when we need them.” And Defence Committee member Mr. John Smith asked: “You must have a figure which is what we need for this country’s defence .”. With the answer of General Sir Kevin O’Donoghue: “The answer is that it depends on the cost . …. Requirement, minimum requirement, cost and other programmes are all intermeshed Conclusion : UK cannot afford the 138 planned F-35s and when the price of the F-35B will rise, when the defence budget crisis will continue, the numbers will decline. (c) From 372 aircraft in 2003 to over 400 aircraft in 2020 unrealistic When all “options” would come into effect the UK would have a fleet of 230 Eurofighter Typhoons and 138 F-35 JSFs and a number of Unmanned Aerial Vehicles, a total fleet of over 400 units in 2020 to replace the fleet of 372 units the UK had in 2003. With the current budget situation this can be mentioned less realistic. (d) Typhoon, F-35 and UCAV programs intermeshed With the current planning in 2020 the tactical fighter fleet of the UK will consist of 182 Typhoons (Tranche 1, 2, 3A), 66 F-35 JSFs and 40 upgraded Tornado’s. To fill the last replacement requirements, the UK will have several options, some excluding other options:

- Procurement of the last Tranche 3B of 48 Eurofighter Typhoons - Procurement of more F-35 JSFs, possibly around 30-40 - Procurement of Unmanned Aerial Vehicle to replace the Tornado in the Recce role.

Like General Sir Kevin O’Donoghue told the Defence Committee in January 2008: “The answer is that it depends on the cost . …. Requirement, minimum requirement, cost and other programmes are all intermeshed” [#51.48]. Cancelling 66 F-35s would save US$ 8 billion (66 x US$122 million [see #51.80 page 30]). Conclusion : budget restrictions make the possibility of executing all options impossible.

Page 55: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 55 of 136

(e) No one-by-one replacement At one time it was expected to include as many as 150 JSFs in two separate buys to replace the Sea Harrier (60) and Harrier (90). The Sea Harrier (a total of 62 remaining FRS1/2) is already withdrawn in 2006 due to budget constraints and will not be replaced. After merging the RN and RAFs Harrier fleet, only 65 Harrier GR7/GR9s are remaining to be replaced. (f) Requirement for 86 aircraft Joint Combat Aircraft (JCA) fleet will consist of four front line squadrons of 12 aircraft with 14 further aircraft serving with the Operational Conversion Unit (OCU) and 2 aircraft with the Operational Evaluation Unit based in the United States. This means a total requirement of 64 aircraft. The other (manned) part of the JCA fleet is a 22 unit element to replace Tornado GR.4s, consisting of 2 front line units of 8 aircraft and six aircraft added to the JCA OCU. Total: 86 aircraft. (g) Defence Review 2010: “Carriers could be scuppered” There is still the possibility that, although contracts have been signed in 2008 to build two new carriers, the 2010 defence review could scupper the plans, as confirmed by Admiral Sir Mark Stanhope, chief of staff of the Royal Navy on September 23, 2009 [#51.112] in the presence of the weapons' procurement minister, Lady Taylor: “Although contracts have been signed to build the aircraft carriers HMS Queen Elizabeth and HMS Prince of Wales, next year's defence review could scupper the plans.” And: “The Royal Navy is bracing itself for budget cuts. Alongside the other two services we will have to make some difficult decisions". "Once capabilities are lost, they can't be plucked from a hat" he said. (h) Workshare and F136 engine cancellation Typhoon and F-35 are complimentary capabilities. The Typhoon being a replacement of the Tornado F3 and Jaguar. The F-35 would assume the role of the Harrier and some Tornado GR4 capabilities. But the latest Typhoons, having developed multi-role capabilities the workshare to be given to the industry will play a growing role. When the number of F-35s to be manufactured will decline worldwide it will impact British workshare. Also when the F136 engine will be cancelled, the UK may opt for a larger number of Typhoons to safeguard and maximise the workshare of the own industry. The GE/RR F136 engine is developed by a joint-venture of General Electric (60%) and Rolls Royce (40%) and threatened by budget cuts of the Obama Administration. The Times reported 20-sep-2009: “Rolls-Royce is fighting a last-ditch battle to stop Barack Obama axing a military-engine contract that could see it share an estimated $50 billion (£30.7 billion) in sales over the next two decades. The aero-engine maker was last week lobbying in Washington to prevent funding being withdrawn for its engine for the F-35 Joint Strike Fighter (JSF). Failure would be a serious setback for Rolls-Royce’s defence business, with job losses on both sides of the Atlantic.” [#51.113].

Page 56: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 56 of 136

5.1.8 Jet fighter requirements of European airforc es 5.1.8.0 Introduction An overview of the European jet fighter market shows that several fighter campaigns in Europe, still under way in 2001, are over now. Alternatives have been choosen and the four years of delay in the development of the and rising cost of the JSF since 2001 has worsened the situation in some countries. Up to now the changed situation is not reflected in the numbers used by officials of the JSF Program Office or Lockheed Martin during press meetings or interviews. Table 51.16 - JSF Market 2008-2034 Europe

Source: prepared by JOBO 5.1.8.1 Albania Current jet fighter fleet (August 2009) No jet fighters. Opportunities Joint Strike Fighter No 5.1.8.2 Austria Current jet fighter fleet (August 2009)

Page 57: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 57 of 136

Since July 2007 the Austrian airforce is using the Eurofighter Typhoon. The original order of 24 has been reduced to 18, then to 15. Delivery will be completed in 2010. The 15 Eurofighter Typhoons are the replacement of 24 Saab Draken fighters. The Typhoon will be operational until 2037. Opportunities Joint Strike Fighter Austria cannot be considered as a JSF prospect. 5.1.8.3 Belarus Current jet fighter fleet (August 2009) 40x Mikoyan-Gurevich MiG-29 35x Sukhoi Su-24 50+ Sukhoi Su-25 Frogfoot-A 5x Sukhoi Su-25UB Frogfoot-B 23x Sukhoi Su-27 Opportunities Joint Strike Fighter No 5.1.8.4 Belgium Background In 2002, the Belgian government decided to impose a "single structure" on its armed forces in which the independent Belgian Air Force ceased to exist. The former Air Force became the Belgium Air Component (COMOPSAIR) of the Armed Forces It consists of 2nd Tactical Wing at AFB Florennes and 10th Tactical Wing at AFB Kleine Brogel, both flying F-16's (total of 4 squadrons). Out of the 160 F-16s originally bought by Belgium, only 105 were upgraded; with further reductions to 72 aircraft in 2005; and planned reduction to 60 in 2015. Current jet fighter fleet (August 2009) 53x F-16AM 15x F-16BM Opportunities Joint Strike Fighter Belgium is planning to start the decision process to replace the F-16 in 2015 at the earliest, with retirement of the F-16 in the twenties. Also an end-life update of the F-16 is under consideration yet with a life extension until 2025-2030. Due to budget restrictions the wanted one-for-one replacement seems to be impossible, according to some political leaders [#51.64]. Belgium was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentions also a start of the acquisition process in 2013 with Letter of Acceptance procedure in 2014 and contract finalising early 2015. First F-35As would be delivered in 2017 [#51.14]. Also in a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of 48+ Belgian planes to replace the current F-16s had been mentioned. However, the facts show this is commercial wishful thinking. When the decision process starts in 2015 the F-35 may be one of the contenders, but also European choices like Dassault Rafale and the cheaper to operate Saab Gripen are candidates. A maximum number of 40-45 aircraft seem to be realistic. 5.1.8.5 Bosnia-Herzigovina

Page 58: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 58 of 136

Current jet fighter fleet (August 2009) 1x Soko Galeb G-4 10x Soko J1 7x Soko J22 Orao Opportunities Joint Strike Fighter No 5.1.8.6 Bulgaria The past decade Bulgaria has been trying actively to restructure its airforce. Currently the attack and defence squadrons of the Bulgarian Air Force are composed mainly of around 12 MIG-21s, 16 MIG-29s (of 22) and some Su-25s. In the past there were also several Su-22s, used primary for surveillance purposes. The condition of these Su-22s and most of the Su-25s (23 aircraft) is bad. A lot of problems has occurred on keeping the aging Russian aircraft operational. Current jet fighter fleet (August 2009) Only some 12 MiG-21bis and MiG-21U of almost 240 acquired from the 60s until the 90s would be in service and some 60 or more are parked on Graf Ignatievo Air Base. A total of 16 MiG-29 fighters are being modernized in order to meet NATO standards, 7 are operational at the moment. Operational: 12x Mikoyan-Gurevich MiG-21 7x Mikoyan-Gurevich MiG-29 4x Sukhoi Su-25UBK Frogfoot-B and some (6?) Sukhoi Su-25K Frogfoot-A Opportunities Joint Strike Fighter To meet the NATO standards Bulgaria wants to modernize the Air Force. But, as a result of new helicopter and transport aircraft purchases it was decided to delay the purchase of new fighters. It is hoped extra funds can be secured in 2009-2011 to purchase 12-24 jet fighters. The main competitors are (new or used) SAAB JAS 39 Gripen, Lockheed Martin F-16 and Boeing F/A-18 Super Hornet. After replacement the requirement for new fighter jets will be fulfilled until 2040. Bulgaria cannot be considered as a JSF candidate. 5.1.8.7 Croatia The long-term defence plan envisaged a purchase of 12 multirole fighters, which were to start entering service by 2010. An official tender calls for 12 aircraft. In late 2007 requests for proposals were issued to the users and manufacturers of the Saab Gripen, F-16, Mirage F-1, Eurofighter and MiG-29. All responded by March 2008. final decision was expected in late 2008 or early 2009. In November 2008 the Croatian government decided to postpone the tender due to the worldwide economic situation. As an interim solution until new fighters are purchased, six to seven MiG-21s (out of over 12 stored a few years ago) might be reactivated after overhaul and modernization. These would join the 12 MiGs modernized in 2003, whose operational life would be extended until 2012. A final decision is expected in mid-2009 by which time a completely new long-term defence plan will have been made. At the same time, after years of research and discussions, Air Force experts have concluded that the Croatian AF can not effectively patrol the airspace with only 12 fighters, but needs at least 16 to 18 fighter aircraft in order to fulfill all its operational tasks.

Page 59: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 59 of 136

Current jet fighter fleet (August 2009) 8x Mikoyan-Gurevich MiG-21bisD single seaters 4x Mikoyan-Gurevich MiG-21UMD twin-seaters The total of 12 MiG-21 are to be retired in 2011 [ #51.77]. These MiG-21s were modernized in 2003. An additional twelve MiG-21bis aircraft are stored and awaiting possible reactivation if the fighter procurement gets further delayed. Since 1996 a total number of 15x MiG-21 has been dismantled for spare parts. Opportunities Joint Strike Fighter Croatia plans to modernize its air force by introducing 12-18 multirole fighters. In the competition are Saab Jas-39C/D Gripen, Eurofighter Typhoon, Mikoyan-Gurevich MiG-29M2 and F-16. After replacement Croatia will have no need for new fighters until 2040. Croatia cannot be considered as a JSF opportunity. 5.1.8.8 Cyprus Current jet fighter fleet (August 2009) Cyprus has no fighter component in the Armed Forces. Opportunities Joint Strike Fighter No 5.1.8.9 Czech Republic After the split in the 90s of the Czechoslovak Republik in the Czech Republic and the Slovak Republic in both countries the MiG-29 was the most modern fighter. However, soon the maintenance costs of the Czech MiG-29 Fulcrums turned out to be too high. Also, as the Czech Republic prepared to become a member of NATO in 1999, it developed new concepts of operations and a new planning for future airforce, including the acquisition of new western fighters. The Mikoyan-Gurevich MiG-23MFs were retired in 1994. The MiG-23MLs in 1998 and the MiG-21s were used to bridge a transition period before buying a new type. The Saab JAS 39 Gripen multi-role fighter aircraft was choosen, with the flood disaster that hit the country during 2003 delaying the deal. 14 Gripens are leased for a 10 year period with an all-in lease agreement (excluding fuel), with the possibility to lease again after this period. There are no signals that after 2013 the lease will not be extended. In fact there is a recommendation on the Gripen and a (military) requirement for a second squadron. Current jet fighter fleet (August 2009) 12 JAS39C and 2 JAS39D leased for 10 years (2003-2013) Opportunities Joint Strike Fighter Czech is considering to buy the Gripens, that were leased in 2003 and to expand the fleet with some more Gripens [#51.62]. Czech Republic was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Also in a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of 24-36 Czech planes to replace the old Su-22 and MiG-21 had been mentioned. However, the facts show this is commercial wishful thinking and has become out of date. Czech Republic cannot be considered as a JSF opportunity after the successful introduction of the Saab Gripen. Also there are important budget constraints.

Page 60: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 60 of 136

5.1.8.10 Denmark Opportunities Joint Strike Fighter Denmark is one of nine JSF partner countries. In paragraph 5.1.7.3 a full description can be found. 5.1.8.11 Estonia Current jet fighter fleet (August 2009) No jet fighters. After Lithuania, Latvia and Estonia joined the NATO organization back in 2004, their air space is protected by NATO. NATO members provide usually 4 fighter aircraft, based in Lithuania, to police the Baltic States airspace. The deployments rotate between NATO members The Baltic States are interested in a collective fighter capability in the near future. Opportunities Joint Strike Fighter No 5.1.8.12 Finland A variant of the Boeing F/A-18 Hornet with restricted ground attack capabilities is the backbone of the Finnish Air Force. The decision to purchase the F-18 Hornet (A total of 64; 57 single-seated F-18C and 7 dual-seate F-18D) was made in 1992, soon after the 1991 collapse of the Soviet Union. In the past Finland had a mixed fleet of Western and Russian aircraft to keep a certain neutrality. Due to budget constraints the number of fighters to be purchased was decreased to only 64. The Hornet was assembled by Patria in Finland and is in service since 1995-2000 with an estimated end-of-life around 2025-2030. A third phase MLU was approved in 2008 [#51.76]. Current jet fighter fleet (August 2009) 55x Boeing F-18C Hornet 7x Boeing F-18D Hornet Opportunities Joint Strike Fighter Finland was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, the facts show it will be a long-term foreign military sales opportunity. A study (2008) of the Finnish Ministry of Defence calls for a possible replacement of the current F-18 by the F-35 in 2025-2030, but with a smaller number than the current fleet [#51.39, #51.99]. Important budget constraints may play a role. 5.1.8.13 France Current jet fighter fleet Armee de l’Air (Airforce) (August 2009) 193x Dassault Mirage 2000C /D /N 34x Dassault Mirage 2000-5 93x Dassault Mirage F1CR/CT (to be replaced by Rafales) Ultimo 2008: 31x Rafale B/C delivered 14x Rafale ordered, delivery 2009 15x Rafale ordered, delivery 2010 11x Rafale ordered, delivery 2011

Page 61: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 61 of 136

8x Rafale ordered, delivery 2012 5x Rafale ordered, delivery 2013 5x Rafale ordered, delivery 2014 Delivery of upgraded Rafales to F3 standard will start in 2014. The ultimate plan is to reduce the Armee de l’Air to a smaller more flexible force of 300 fighters (Mirage 2000 and Rafale). Current jet fighters Naval Air Fleet [#51.107, page13] 45x Dassault Super Etendard (to be replaced by 37 Rafales, not one-by-one) 9x Dassault Rafale M (F1) stored to be upgraded to F3 standard 13x Dassault Rafale M (F2) delivered 3x Dassault Rafale M (F2) ordered 12x Dassault Rafale M (F3) ordered Opportunities Joint Strike Fighter A non European choice would not seem a probability. 5.1.8.14 Germany In the 1980s the (over 1000) Starfighters were completely replaced by US-built McDonnell Douglas F-4 Phantom II fighters and European Panavia Tornado fighter-bombers, a joint product of the United Kingdom, Germany, and Italy. The Phantom and Tornado are still main fighters of the Luftwaffe, with a lot of upgrades to their electronics and the addition of the AIM-120 AMRAAM air-to-air missile for the air defense of Germany. The upgraded F-4F Phantom will be operational until 2015 [#51.77] after having been in service since 1982. Beginning in June 1979, the Luftwaffe took delivery of 212 Panavia Tornado IDS/ECR fighters and the German Navy (Marineflieger) received 112 Tornado IDSs. In late 2004 the last Navy Tornado unit was disbanded. The maritime combat role has taken over by the Luftwaffe by a unit with upgraded Tornados (carrying Kormoran II and AGM-88 HARM missiles). The F-4F Phantom will be replaced from 2012 by Eurofighter Typhoons. On 13 January 2004, the Ministry of Defence announced major changes to the German armed forces. A major part was the plan to cut the German fighter fleet from 426 aircraft in early 2004 to 265 by 2015. Assuming the full German order for 180 Eurofighter Typhoons is fulfilled, this will see the Tornado force reduced to 85. Two wings of Tornado’s will be operational until 2020, JBG32 at AFB Lechfeld with the Tornado ECR/IDS version (flying since 1985) and AG51 at AFB Jagel with the reconnaissance version flying since 1993 [$51.AFM1008]. Total or partial replacement by unmanned aerial vehicles will be a possibility. Current jet fighter fleet (August 2009) 64x McDonnell Douglas F4F in service and 12 more in storage [#51.106] 33x Panavia Tornado ECR electronic warfare 164x Panavia Tornado IDS attack/reconnaissance (and 2 extra in storage) [#51.106] 12x Panavia Tornado IDS training (and 1 extra in storage) [#51.106] Total fleet of Eurofighter Typhoon will consist of (introduced 2006): 145x Eurofighter Typhoon single seat (21 in service; 124 ordered) [#51.106] 33x Eurofighter Typhoon dual seat (14 in service; 19 ordered) The contract finalizing of the Tranche3A has been completed in Summer 2009 (31 ordered) [#51.107] with contract finalizing of the last Trache 3B expected in 2011. Opportunities Joint Strike Fighter

Page 62: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 62 of 136

It is remarkable that still in 2007 Germany was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Indeed, some presentations were made in Germany after professional interest showed by Germany. However, the facts show this is more commercial wishful thinking then realism as since the late 1970s, the German Air Force (Luftwaffe) of West Germany and later the reunited Germany has actively pursued the construction of an European aerospace industry, as shown in combat aircraft like the Panavia Tornado and its successor the Eurofighter Typhoon. So Germany cannot be considered as a JSF opportunity after the successful introduction of the Eurofighter Typhoon. 5.1.8.15 Greece As a result of Greek-Turkish tensions (mind the Turkish invasion in 1974 in Cyprus) the country has a relatively large air force (Hellenic Air Force). In the 1960s and 1970s the HAF fleet consisted of US aircraft (F-104 Starfighter, F-102 Delta Dagger, F-5 Freedom Fighter, F-4 Phantom) and French Dassault Mirage F1CGs. In 1988 the first fourth generation fighters were introduced with the arrival of Mirage 2000 EG/BG aircraft and in 1989 with the arrival of F-16C/D Block 30 aircraft. But still in november 1992 more RF-4E were delivered to replace 34 year old RF-84 Thunderflash aircraft. In 1997 the replacement by fourth generation aircraft continued with the arrival of the First of forty F-16 Block 50. In September 2004 started the Mirage 2000BG/EG fleet upgrade to the standard 2000-5 Mk2, a project executed by Dassault in cooperation with the local Hellenic Aerospace Industry (EAB). In 2005, Greece started adding a total number of 60 4.5th generation F-16 Block 52+ (original contract of 90) to its inventory. Several units with old A-7E Corsairs and F-4 Phantoms have ended their operational life and the Hellenic Air Force, according to the Supreme Air Force Council "2007-2012 operational planning" study (published in 2007) would have a requirement of a total fleet of 300 modern 4th tot 5th generation aircraft. In recent years several Request for Information were issued to Eurofighter (Typhoon), Dassault (Rafale), Lockheed Martin (F-16 and F-35), Boeing (F/A-18 Super Hornet, F-15H Eagle), Saab (Gripen) and also a pro-Russian lobby in Greece is promoting the acquisition of Sukhoi Su-35s (keep in mind Greece also bought advanced Russian S-300 surface-airmissiles). Current jet fighter fleet (August 2009) 17x Dassault Mirage 2000-5 Mk2 26x Dassault Mirage 2000 EGM 3x Dassault Mirage 2000 BGM A total of 10 M2000 EGM/BGM were upgraded with radar capabilities and weapons systems bringing them to Mirage 2000-5 standard. 53x F-4E 2000 ; RF-4E A total of 36 F-4E Phantoms have been upgraded with advanced electronics under the program "Peace Icarus 2000", this end-life-update will extend the F-4E in service date until about 2015.

49x A7E/H Corsair II (2 stored, partly out of service since 2007) 13x TA-7C Corsair II The A-7E and TA-7C will be replaced by the F-16 C/D Block 52+ in 2009-2010.

34x Lockheed Martin F-16C block 30 (1989-1990)

Page 63: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 63 of 136

6x Lockheed Martin F-16D block 30 (1989) 32x Lockheed Martin F-16C block 50 (1997-1998) 8x Lockheed Martin F-16C block 50 (1997-1998) 40x Lockheed Martin F-16C Block 52 (2002-2004) 20x Lockheed Martin F-16C Block 52 (2002-2004) 18x Lockheed Martin F-16C Block 52+ (delivery in 2009-2010) 12x Lockheed Martin F-16D Block 52+ (delivery in 2009-2010) Opportunities Joint Strike Fighter Greece was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentions also a start of the acquisition process in 2008 with Letter of Acceptance procedure in 2011 and contract finalising late 2011. First F-35As would be delivered early 2014 [#51.14]. However, the facts show this is commercial wishful thinking. There is no current F-35 RFI running. In short term there is a requirement to replace the last A-7H Corsair and F-4E Phantom. A RFI is running at the moment with Rafale, Eurofighter, Gripen, F-16C/D and Boeing F/A-18 Super Hornet as competitors for a 40+ quantitiy to be delivered between 2012 and 2015. [#51.45, #51.54, #51.58]. In the longer term there is a requirement to replace the Mirage 2000 and oldest F-16C/D aircraft. This long term requirement may be seen as an export opportunity for the F-35 JSF. 5.1.8.16 Hungary After the invasion in November 1956 of the Soviet forces in Hungary the air force was demobilized and later a new air force was resurrected as an integral part of the army. After 1990 the Hungarian Air Force remained primarily just as a small defensive force, since 2002 integrated in the NATO with the flying units of the air force organised into a single Air Command. The fleet of MiG-29 fighters will be replaced by new fighters. Since 2006 the Hungarian Air Force is leasing 12 Saab JAS-39C Gripens and 2 Saab JAS-39D dual-seaters, for 12 years with a buy-option after this period. A total of 8 MiG-29 is remaining from the original 28 MiG-29 and MiG-29UB fighters, with a (military) requirement to buy an additional 4 to 10 Saab JAS39 Gripens to replace them. Current jet fighter fleet (August 2009) 8 x Mikoyan-Gurevich MiG-29 12 x Saab JAS-39C 2 x Saab JAS-39D Opportunities Joint Strike Fighter Hungary was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Also in a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of an unknown number of Hungarian planes to replace the MiG-21 and MiG-29 had been mentioned. However, the facts show this is commercial wishful thinking and has become out of date after the successful introduction (for a 30-year service period 2006-2036) of the Saab Gripen in the Hungarian Air Force. Hungary cannot be considered as a JSF opportunity after the successful introduction of the Saab Gripen. Also there are important budget constraints. 5.1.8.17 Iceland

Page 64: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 64 of 136

Current jet fighter fleet (August 2009) No fighter component in the Armed Forces Opportunities Joint Strike Fighter No JSF candidate 5.1.8.18 Ireland Current jet fighter fleet (August 2009) No fighter component in the Armed Forces Opportunities Joint Strike Fighter No JSF candidate 5.1.8.19 Italy Opportunities Joint Strike Fighter Italy is one of nine JSF partner countries. In paragraph 5.1.7.4 a full description can be found. 5.1.8.20 Latvia Current jet fighter fleet (August 2009) No fighter component in the Armed Forces. After Lithuania, Latvia and Estonia joined the NATO organization back in 2004, their air space is protected by NATO. NATO members provide usually 4 fighter aircraft, based in Lithuania, to police the Baltic States airspace. The deployments rotate between NATO members The Baltic States are are interested in a collective fighter capability in the near future. Opportunities Joint Strike Fighter No JSF candidate 5.1.8.21 Lithuania Current jet fighter fleet (August 2009) No fighter component in the Armed Forces. Baltic states After Lithuania, Latvia and Estonia joined the NATO organization back in 2004, their air space is protected by NATO. NATO members provide usually 4 fighter aircraft, based in Lithuania, to police the Baltic States airspace. The deployments rotate between NATO members The Baltic States are are interested in a collective fighter capability in the near future. Opportunities Joint Strike Fighter No JSF candidate 5.1.8.22 Luxembourg Current jet fighter fleet (August 2009) No airforce

Page 65: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 65 of 136

Opportunities Joint Strike Fighter No 5.1.8.23 Macedonia

Macedonia, as one of the former Yugoslav States, started the development of an own Macedonian Air Force from scratch in 1991. In June 2001 four Sukhoi Su-25 (three Su-25 and one Su-25UB) arrived, making them the first combat fighters for the Macedonian Air Force and Air Defence Forces. The four Su-25 Frogfoots were withdrawn from use during 2004 according to the draft to join NATO. Macedonia has no intention of operating jet fighters in the future and will depend on its NATO allies for defence of its airspace. Current jet fighter fleet (August 2009) No fighter component in the Armed Forces Opportunities Joint Strike Fighter No JSF candidate 5.1.8.24 Malta Current jet fighter fleet (August 2009) No fighter component in the Armed Forces Opportunities Joint Strike Fighter No JSF candidate 5.1.8.25 Moldova Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.8.26 Montenegro Current jet fighter fleet (August 2009) 15x Soko G-4 Opportunities Joint Strike Fighter No 5.1.8.27 The Netherlands Opportunities Joint Strike Fighter The Netherlands is one of nine JSF partner countries. In paragraph 5.1.7.5 a full description can be found. 5.1.8.28 Norway

Page 66: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 66 of 136

Opportunities Joint Strike Fighter Norway is one of nine JSF partner countries. In paragraph 5.1.7.6 a full description can be found. 5.1.8.29 Poland During the 1990s, Poland did not purchase any new combat planes, and only purchased some used MiG-29s from the Czech Republic (1995) and Germany (2004). From 1997, the Polish government started looking looking for a replacement for its ageing fleet of MiG-21 and Su-22 aircraft. The original requirement was for 100 multi-purpose fighters, to replace an existing fleet of 350 combat aircraft. The Soviet-era MiG-21s were finally withdrawn in 2003. So, in 2004, the only combat aircraft were the air-superiority Mikoyan-Gurevich MiG-29 and Sukhoi Su-22 ground attack aircraft, with a restricted combat value. In 2003, the Lockheed Martin F-16C/D Block 52 was chosen as a new multi-role fighter after a heavy competition with European aerospace companies Dassault (Mirage 2000) and Saab (JAS-39 Gripen). The US$ 3.5 billion deal was won by the USA after a surprising 260% offset agreement between Lockheed-Martin and the Polish government, which sees an amount of up to $9.7 billion return in the Polish economy [#51.100]. Major projects include plans by General Motors to expand a plant in Gliwice, Poland, and a pledge by Motorola to invest in a state-of-the-art communication system for Polish public services. First deliveries of a total of 48 F-16s took place in November 2006 and will continue until 2009 with three squadrons fully operational in 2012. Current jet fighter fleet (August 2009) 36x Lockheed Martin F-16C Block 52+ (multi-role) 12x Lockheed Martin F16D Block 52+ (mulit-role, twinseat) 25x Mikoyan-Gurevich MiG-29 (Air Superiority) 6x Mikoyan-Gurevich MiG-29UB (twin seat) The MiG-29 fleet consists of 12 purchased in 1989; some used Czech (1995) and some used former German aircraft (2004) [#51.85]. Service life may end around 2015-2016. 48x Sukhoi Su-22M4K and Sukhoi Su-22UM3K Ground Attack aircraft; remaining from 110 purchased in 1984; to be retired in 2012, being replaced by the new F-16s [#51.85]. Opportunities Joint Strike Fighter Poland was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Also in a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of an unknown number of Polish planes to replace the MiG-21 and MiG-29 had been mentioned. At that time Poland had indicated that it wanted to join the EMD (SDD) phase of the JSF, but in 2001 it was not clear at which level. Later it became clear financially it was not feasible and Poland made a choice to buy new F-16Cs and F-16Ds. However, at the time of choosing the F-16 in 2003, US officials were promising that Poland would be able to derive advantages from the JSF programme and from its internationality and long-term economic cooperation of many countries. Lieutenant-General Tom H. Walters Jr., director of the US Defense Security Cooperation Agency, which job is to sell American military equipment to foreign trade partners told the Polish partners: “Acquiring the F-16C/D fighter will make it easier for Poland to transition into the new generation F-35 Joint Strike Fighter aircraft , which will be the most technologically advanced multirole fighter. The Polish Air Force, equipped with the F-16C/D and the F-35 by the year 2020, will become one of the most modern air forces in the world. By sustaining advantages from the military tactics training offered by the US Air Force, the Polish Air Force can modernize and will be able to

Page 67: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 67 of 136

drop projectiles on targets with perfect precision. What's more, the Polish JSF programme entry will create the possibility of advantages for Polish industry. The programme will enable Polish industry to take part in the US$ 400 billion enterprise". And 14 August 2008, Poland signed a preliminary agreement to build and stationing in Poland a anti-ballistic missile base. The document was signed in Warsaw by U.S. Secretary of State Condoleezza Rice and Polish Foreign Minister Radoslaw Sikorski. The United States will help modernize the Polish army, Washington has committed itself to defend the Polish in the event of an attack, Poland will take over a dozen (probably 19) Patriot PAC-3 missiles from the U.S. Army and part of the agreement [#51.84] is that the Polish Air Force will start contracting about the purchase of “several additional multi-purpose aircraft (about 50) F-16”. [#51.86]. The replacement of the MiG-29 cannot be suspended any longer, and the F-35 is not an option by several reasons (not available in time, affordability). After the purchase of 50 more F16s Poland will not have a fighter requirement until the late 30s. So, the facts show Poland is no longer a JSF candidate, certainly not in near term. 5.1.8.30 Portugal Since the military coup in 1974 after the revolutions in the Portugese colonies Mozambique, Angola and Portugese Guinea during the late 1960s, Portugal has changed the organisation of the Portugese Air Force and reduced the number of aircraft from 850 in 1974 to only about 290 in 1976. The 1990s brought the acquisition of modern aircraft such as 20 new F-16 Block 15 Fighting Falcons and a second batch of 25 F-16 Block 15s, which replaced the 50 A-7P Corsair II and the relocation of several squadrons to other bases. Portugal joined the European Participating Air Forces (EPAF), a cooperation (F-16 Project Group) of The Netherlands, Belgium, Denmark, Norway and Portugal for the sustainment and upgrading of F-16s in Europe. Receiving MLU packages by Portugese aircraft was a slow process, being seriously hampered by operational an budget limitations. Original procurement of F16s: 17x F-16AM (Block 15OCU) (New, delivery 1994-1995) 3x F-16BM (Block 15OCU) (New, delivery 1994) 21x F-16A (Block 15) (Used, ex-USAF/ANG 1999-2000) 4x F-16B (Block 15) (Used, ex-USAF/ANG 1999-2000) Back in 2007 some non-MLU F16s were available for sales (in storage). If and when this sale will materialize is still uncertain. The impact at current F-16 squadrons is also unclear. Current jet fighter fleet (August 2009) 21x Lockheed Martin F-16AM 6x Lockheed Martin F16BM Two squadrons are operational with F-16s at AFB Monte Real Opportunities Joint Strike Fighter Portugal was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Also in a document produced for the Dutch Parliament (Basis Document, 2001) [#51.82] a possible requirement of an unknown number of Portugese planes to replace the A-7 Corsairs had been mentioned. However, the facts show this has become out of date. The main part of the current fleet of F16s has been delivered in 1994-1995 and may be operational until 2018-2025. In that timeframe in a possible fighter competition the F-35 may play a role. However, not without competition, because also European companies have mentioned Portugal as an option in their sales analysis.

Page 68: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 68 of 136

5.1.8.31 Romania The Romanian Air Force is in process to replacing its Mig 21 Lancer (Digital Fishbeds) with maximum 48 new multirole aircraft .The most probable contenders are the Lockheed Martin F-16, Saab Gripen [#51.83] and Eurofighter Typhoon, but also Dassault Rafale and Boeing F/A-18 Super Hornet have been mentioned as a possibility. The budget is around US$ 4.5 billion. Several options are under consideration, including buying used aircraft or a mixed new/used fleet. Attempts to purchase surpluis F-16s from Belgium or The Netherlands have not been materialised. In May 2008 the Romanian government requested the US DSCA permission for a possible sale of 24 new F-16C/D Block 52s and 24 used F-16C/D Block 25s [$51.AFM0209]. A decision will be taken in 2010 by the government . The Mig 21 will reach their end of operational service in 2012. Current jet fighter fleet (August 2009) 38 LanceR A ground attack 11 LanceR B dualseat training 20 LanceR C airdefense All upgraded MiG-21 LanceRs (the remaining fleet) being delivered between 1978-1981 and upgraded by the own aviation industry with help of Israel [#51.78]. Opportunities Joint Strike Fighter Romania was not identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, in 2008 in an attempt to safeguard a US sales to Romania, the USA has offered a “lease option” of 48 F-16C/Ds from USAF Air National Guard reserves until 2020, when Romania makes a commitment to buy the F-35 starting from 2020. Romania would gain the status of partner in the Joint Strike Fighter Program. But Romania wants to have important industrial “off-set” and with no fixed price known and with the restrictions in defense budgets this may not be probable. 5.1.8.32 Serbia The Serbian Air Force fleet consists of some remaining Russian and indigenous combat aircraft. The Air Force is looking to replace the aging Migs with a new multirole fighter. The former-Yugoslav Air Force already had plans to replace the MiG-21s, but the wars stopped all projects. The Air Force also has many former-Yugoslav designed and manufactured aircraft. These combat aircraft included the Soko G-4 Super Galeb and the Soko J-22 Orao. There are no reliable figures about the number of these aircraft still in-service, but there may be assumed that some 32 attack J-22/attack-trainer NJ-22 aircraft are in service. Current jet fighter fleet (August 2009) 3x Mikoyan-Gurevich MiG-29B (own typecode L-18; since 1987) 1x Mikoyan-Gurevich MiG-29UB (own typecode NL-18, since 1987) 24x Mikoyan-Gurevich MiG-21bis (own typecode L-17, delivered 1977-1983) 7x Mikoyan-Gurevich MiG-21UM (own typecode NL-16, delivered 1977-1980) 1x Mikoyan-Gurevich MiG-21M (own typecode L-15, delivery 1977) 15x Soko J-22 Orao 7x Soko NJ-22 Orao 8x Soko IJ-22 Orao 2x Soko INJ-22 Orao Opportunities Joint Strike Fighter No

Page 69: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 69 of 136

5.1.8.33 Republika Srpska Current jet fighter fleet (2006) 9x Soko J-21 Jastreb (attack/reconaissance) 7x Soko J-22 Orao (attack) 1 x Soko G-4 Super Galeb Opportunities Joint Strike Fighter No 5.1.8.34 Russia Current jet fighter fleet Airforce (August 2009) 39x Mikoyan-Gurevich MiG-25 405x Mikoyan-Gurevich MiG-29 307x Mikoyan-Gurevich MiG-31 320x Sukhoi Su-24 250x Sukhoi Su-25 30x Sukhoi Su-25UB Frogfoot-B 6x Sukhoi Su-25SM Frogfoot 445x Sukhoi Su-27/30 Flanker 10x Sukhoi Su-34 and 48 in order, to be fielded in 2015 (#51.68) (Total requirement until 2022: 300 Sukhoi Su-34s [#51.91]) 300x PAK-FA (requirement planning [#51.91]) Current jet fighter fleet Navy (August 2009) 94x Sukhoi Su-24 8x Sukhoi Su-25UBP 6x Sukhoi Su-25UTG 23x Sukhoi Su-27 Opportunities Joint Strike Fighter No 5.1.8.35 Slovakia After the split in the 90s of the Czechoslovak Republik in the Czech Republic and the Slovak Republic in both countries the MiG-29 was the most modern fighter. Also, as the Slovak Republic prepared to become a member of NATO in 1999, it developed new concepts of operations and a new squadron organisation. In the 1990s Slovakia retired the older aircraft, including the entire fleet of Sukhoi Su-22 attack bombers and Mikoyan-Gurevich MiG-21 interceptors Current jet fighter fleet (August 2009) Status July 2009 10x Mikoyan-Gurevich MiG-29AS 1993-1996 2x Mikoyan-Gurevich MiG-29UBS 1993-1996 1x Mikoyan-Gurevich MiG-29UB (ex-Czech) in use after being overhauled 7x Mikoyan-Gurevich MiG-29A (ex Czech) in storage 1x Mikoyan-Gurevich MiG-29UB (ex Czech) in storage

Page 70: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 70 of 136

Opportunities Joint Strike Fighter Slovak is considering to buy a replacement for the MiG-29 with several options under consideration. There is a requirement for 14 fighter jets. Slovak Republic cannot be considered as a JSF opportunity, because the end-of-life of the MiG-29 will be within the 2012-2015 timeframe and there are important budget constraints. 5.1.8.36 Slovenia Current jet fighter fleet (August 2009) In 2004 Slovenia entered NATO. Since NATO is responsible for protecting the Slovenian airspace. The planning is to operate own jet aircraft (acquisition process will start in 2010-2011) from 2015 and major restructuring of the Airbase Cerklje has been planned. Opportunities Joint Strike Fighter No 5.1.8.37 Spain After the decision to participate in the NATO (membership since 1982) the organization and equipment of the Spanish Air Force was modernised. Planes like the French Mirage III and Mirage F1 were the backbone of the Air Force during the 1970s and 1980s until the arrival of the US Boeing F/A-18 Hornet in the late 1980s. The Spanish Air Force is currently replacing older fighter aircraft in the inventory with the recently introduced Eurofighter Typhoon, manufactured with Spanish participation. Current jet fighter fleet Air Force (August 2009) 36x Dassault Mirage F1M (since 1975) 3 x Dassault Mirage F1BM (since 1975) 67x Boeing EF-18M Hornet (since 1986, being replaced by Eurofighter Typhoon) 18x Boeing F/A-18A+ Hornet (used, ex-US Navy, additional procurement in 2004) 20x Northrop F-5BM (training, in use since 1970) 36x Eurofighter Typhoon since 2003 14x Eurofighter Typhoon two-seat since 2003 The total procurement of Eurofighter Typhoon will consist of 87 Eurofighters (71 single seat and 16 dual seat) with deliveries divided in several tranches: 19 in Tranche 1, 34 in Tranche 2, 20 in Tranche 3A and 14 in Tranche 3B [#51.107]. Current jet fighter fleet Navy (Armada) (August 2009) The Spanish Navy operates a total of 17 EAV-8B Harrier aircraft: 12x McDonnel-Douglas EAV-8B Matador (Harrier II) (1987-1988) 4x McDonnel-Douglas EAV-8B+ Matador (Harrier II+) (1996) 1x McDonnel-Douglas TAV-8B Opportunities Joint Strike Fighter Spanish Navy is identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentions also a start of the acquisition process in 2011 with Letter of Acceptance procedure in 2013 and contract finalising early 2014. First F-35Bs would be delivered in 2016 [#51.14]. Spain was seen as an inevitable F-35B customer for the simple reason the Navy is a Harrier operator. And indeed, around 2000 Rear Admiral Craig Steidle of the JPO has briefed the Spanish Navy about the capabilities [#51.67].

Page 71: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 71 of 136

However at this moment there are no any signs from the government for a RFI or serious procurement process. The potential may be present to sell 12-18 F-35B (STOVL version) Joint Strike Fighters to replace the current Harriers. However there are important budget restrictions and some politicians publicly are doubting whether the fighter component within the navy has to be continued in the future. Therefore a sales of the F-35B to Spain is highly uncertain and the number will be small (only 12 to 16). 5.1.8.38 Sweden Current jet fighter fleet (August 2009) 131x Saab JAS39A/C with 31 ordered 23x Saab JAS39B/D with 5 ordered Total 190, but a lot of them are in storage. Budget constraints will bring back the total number of the Swedish Gripen fleet to 100 aircraft. Surplus aircraft are being offered to other countries in cooperation with Saab, including avionics upgrading packages. Opportunities Joint Strike Fighter Having an own fighter industry (Saab) and a long term commitment until 2040 between the Swedish Air Force and Saab to use and continuously upgrade the current JAS-39 Gripen fighters, Sweden cannot be considered as a potential JSF candidate. In 2008 an agreement was signed to investigate the possibility to upgrade old JAS-39 Gripens to Gripen NG status. 5.1.8.39 Switzerland Current jet fighter fleet (August 2009) 26x Boeing F/A-18C Hornet 7x Boeing F/A-18D Hornet 47x Northrop F-5E Tiger II 12x Northrop F-5F Tiger II Opportunities Joint Strike Fighter In 2008 a competition started between Eurofighter, Rafale and Gripen [#51.49] for a partial fighter replacement of F-5 Tigers, sheduled to be replaced after 2010. A decision was originally due to be taken in 2009, but has been delayed until early 2010. A requirement for 22-33 fighters. The fighter that will replace the F-5 Tiger also will be the most probable replacement of the Hornet. Total Swiss Air Force will be reduced in the future. Switzerland was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, the facts of the current fighter replacement competion show this is commercial wishful thinking and has become out of date. Switzerland cannot be considered as a JSF opportunity. 5.1.8.40 Turkey Opportunities Joint Strike Fighter Turkey is one of nine JSF partner countries. In paragraph 5.1.7.7 a full description can be found. 5.1.8.41 Ukraine

Page 72: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 72 of 136

Current jet fighter fleet (August 2009) 220x Mikoyan-Gurevich MiG-29 55x Sukhoi Su-17 230x Sukhoi Su-24 30+x Sukhoi Su-25 Frogfoot-A 5+x Sukhoi Su-25UB Frogfoot-B 74x Sukhoi Su-27 Flanker Opportunities Joint Strike Fighter No 5.1.8.42 United Kingdom Opportunities Joint Strike Fighter The United Kingdom is one of nine JSF partner countries. In paragraph 5.1.7.8 a full description can be found.

Page 73: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 73 of 136

5.1.9 Jet fighter requirements Middle East and Nor th Africa 5.1.9.0 Introduction An overview of the jet fighter market in the Middle East and North Africa shows that most of the opportunities in jet fighter campaigns here, known in 2001, are not over yet. But competitors are active en the four years of delay in the development of the and rising cost of the JSF since 2001 has worsened the market opportunities situation in several countries. Table 51.17 - JSF Market 2008-2034 Middle East and North Africa

Source: prepared by JOBO 5.1.9.1 Algeria Current jet fighter fleet (August 2009) 14x Mikoyan-Gurevich MiG-25 51x Mikoyan-Gurevich MiG-29, 35 returned to Russia (#51.79) 35x Sukhoi Su-24 18x Sukhoi Su-27/30 and 20x Sukhoi Su-30MKA on order Opportunities Joint Strike Fighter Algeria has a Russian oriented defence material procurement, though a defence agreement signed with France in 2000. Algeria cannot be considered as a JSF candidate.

Page 74: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 74 of 136

5.1.9.2 Bahrain Current jet fighter fleet (August 2009) 8x Norhtrop F-5E (1986) 4x Northrop F-5F (1986) 7x Lockheed Martin F-16C Block 40 (1990) 4x Lockheed Martin F-16D Block 40 (1990) 10x Lockheed Martin F-16C Block 40 (2000) Still a total of 21 Lockheed Martin F16C/Ds operational of the total of 22 delivered [#51.FG]. Opportunities Joint Strike Fighter Bahrain was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, during a visit in Februay 2009 the French president Sarkozy aimed to sell Dassault Rafales to replace the country’s aging F-5s [#51.57. Also mentioned by Saab as a possible JAS-39 Gripen operator. So there may be F-35 salespotential, but not without competition. 5.1.9.3 Egypt Current jet fighter fleet (August 2009) 34x McDonnel-Douglas F-4E Phantom II 45x Shenyang F6 60x Shenyang F7 59x Mikoyan-Gurevich MiG-21 76x Dassault Mirage 5 E2/SDE/SDR 6x Dassault Mirage 5 SDD 15x Dassault Mirage 2000EM 4x Dassault Mirage 2000BM 155x Lockheed Martin F-16A/C 48x Lockheed Martin F16B/D In the past Egypt got a lot of Lockheed Martin F-16s, in 6 batches 34x F-16A Block 15 in 1982-1983 8x F-16B Block 15 in 1982-1985 34x F-16C Block 32 in 1986-1988 6x F-16D Block 32 in 1986-1987 35x F-16C Block 40 in 1991-1995 12x F-16D Block 40 in 1991-1993 34x F-16C Block 40 in 1994-1995 12x F-16D Block 40 in 1994-1995 21x F-16C Block 40 in 1999-2000 12x F-16C Block 40 in 2001-2002 12x F-16D Block 40 in 2001-2002 Opportunities Joint Strike Fighter The Lockheed Martin F-16 is the backbone of the Egyptian Air Force, buying some 220 F-16s and making it the fourth largest F-16 operator in the world. Egypt was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. In May 2009 Lockheed Martin CEO was quoted by Bloomberg that there might be a sale of 24 new F-16s, so the F-35 cannot be seen as a near term option for Egypt. Also there are important budget constraints. Recently, Egypt has turned to China as a more attractive (low priced) source of fighter aircraft.

Page 75: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 75 of 136

Where Egypt received billions in U.S. taxpayer funded military aid in the past to pay the U.S. F-16s, things have been changed and the “selling" of aircraft with large amounts financed with own U.S. tax dollars to a country that receives military aid paid for by the U.S. taxpayer is not as popular in 2009 as back in the 1980s. But Egypt may be considered as a long term F-35 Foreign Military Sales opportunity.

5.1.9.4 Iran Current jet fighter fleet (August 2009) 65x McDonnel-Douglas F-4D/F-4E /RF-4E Phantom II 40x Norhtrop F-5E / RF-5A 20x Northrop F-5F 18x Shenyang F-6 17x Shenyang F-7 25x Grumman F-14 Tomcat 40x Mikoyan-Gurevich MiG-29 3x Dassault Mirage F-1 4x Sukhoi Su-20 40x Sukhoi Su-22 29x Sukhoi Su-24 7x Sukhoi Su-25K 3x Sukhoi Su-25UBK 3x Sukhoi Su-25UBT The national Iranian industry is developing figthers based on the old F-5 design, like the twin finned Saeghe and the Azarakhsh (F5 derivative with mid wing configuration) Opportunities Joint Strike Fighter No 5.1.9.5 Iraq Current jet fighter fleet (August 2009) 36 Lockheed Martin F-16s to be ordered (#51.76) Opportunities Joint Strike Fighter No 5.1.9.6 Israël Current jet fighter fleet (August 2009) 102x McDonnel-Douglas A-4E /H /N Skyhawk (85 more in storage) 22x McDonnel-Douglas TA-4H /J 42x Boeing F-15A /C 15x Boeing F-15B /D 25x Boeing F-15I 163x Lockheed Martin F-16A /C 66x Lockheed Martin F-16B 90x Lockheed Martin F-16I and 11 more ordered Opportunities Joint Strike Fighter

Page 76: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 76 of 136

Israël is identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentions also a start of the acquisition process in 2007 with Letter of Acceptance procedure in 2009 and contract finalising early 2010. First F-35As would be delivered for evaluation in 2012 with first operational deliveries early 2014 [#51.14]. However many problems arose after the publication of the Letter of Acceptance by the US DSCA in 2008, but later followed by heavy discussions about the high price of f over US$150 million per unit, far over early estimates. Also the negotiations with the Pentagon were troubled by Israeli demands on three issues - the integration of Israeli-made electronic warfare systems into the plane, the integration of Israeli communication systems and the ability to independently maintain the plane in the event of a technical or structural problem” [#51.98]. Where Israël received billions of U.S. taxpayer funded military aid in the past to pay the U.S. F-16s, things have been changed and the “selling" of aircraft with large amounts financed with own U.S. tax dollars to a country that receives military aid paid for by the U.S. taxpayer is not as popular in 2009 as back in the 1980s. The current status is that in July 2009 a Letter of Request has been send by Israel for a first batch of 25 F-35As with a possible option for 50 more. Contracting has to be finalised early 2010 for the first 25 units, but in the Israeli News of September 2009 [#51.98] [#51.105] officials are mentioning troubled negotiations and a possible delay. The Jerusalem Post quoted an unidentified senior Israeli officer as saying that “if the cost per aircraft reached $100 million the Defense Ministry would have to reconsider the number of aircraft it would be able to buy.” The introduction of the new “stealthy” Boeing F-15SE Silent Eagle means there is a potential alternative for the Israeli forces [#51.26; #51.27; #51.31] 5.1.9.7 Jordan Current jet fighter fleet (August 2009) 65x Northrop F-5E/F 10x Lockheed Martin F-16A Block 15 ADF (2 more in storage) (1997-1998) 4x Lockheed Martin F-16A Block 15 ADF (1997-1998) 16x Lockheed Martin F-16A Block 15 ADF (2003) 1x Lockheed Martin F-16A Block 15 ADF (2003) 21x Dassault Mirage F1CJ/EJ (and 12 in storage) soon to be replace by F16 1x Dassault Mirage F1DJ, soon to be replaced by F16 12x Lockheed Martin F-16AM2 ex-BAF (2007-2009) 4x Lockheed Martin F-16BM2 ex-BAF (2007-2009) 5x Lockheed Martin F-16AM ex-RNLAF (2007-2008) [#51.76] 3x Lockheed Martin F-16AM ex-RNLAF (2007-2008) [#51.76] An update program with Turkish industry (TAI) for older F-16 Block 15 ADFs is in process. Opportunities Joint Strike Fighter Jordan was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. Jordan only can be considered as a long-term Foreign Military Sales JSF opportunity after the successful introduction of the well maintained, MLU-upgraded former Belgian and Dutch F-16AM/BMs and the update program of older F-16s. The end-life may be extended well into the 2020s. Also there are important budget constraints. 5.1.9.8 Kuwait Current jet fighter fleet (August 2009) 28x Boeing F/A-18C Hornet

Page 77: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 77 of 136

7x Boeing F/A-18D Opportunities Joint Strike Fighter Kuwait was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, during a visit in Februay 2009 the French president Sarkozy aimed to sell Dassault Rafales to replace the country’s aging F-5s. Also mentioned by Saab as a possible JAS-39 Gripen operator and by Boeing as a potential F/A-18 Super Hornet user. [#51.56, #51.57]. So there may be F-35 sales potential, for 24-36 units, but not without competition. 5.1.9.9 Lebanon Current jet fighter fleet (August 2009) No operationaljet fighter. Rebuilding their airforce since 2008; purchase under consideration of 10 Mikoyan-Gurevich MiG-29s [#51.78]. Opportunities Joint Strike Fighter No 5.1.9.10 Libya Current jet fighter fleet (August 2009) 13x Soko J-21 Jastreb 20x Mikoyan-Gurevich MiG-21 125x Mikoyan-Gurevich MiG-23 94x Dassault Mirage 5D /DE /DR (Storage) 14x Dassault Mirage 5DD (Storage) 32x Dassault Mirage F-1AD /ED, partly out of service 6x Dassault Mirage F-1BD, partly out of service 80x Sukhoi Su-22 2x Sukhoi Su-24 Opportunities Joint Strike Fighter In January 2007 the international press quoted government source in Libya saying it has chosen to order 13-18 Rafale jets from French manufacturer Dassault. Libya was said to have chosen the Rafale to replace its ageing Mig fighters ahead of competing offers from China and Russia as well as Eurofighter. The contracting of the 2,5 billion deal (including weapons and support) would be finalised in 2008 or 2009. The order is not confirmed yet. To help keep the relationship alive, the French air force has dispatched three Rafales to an air base near Tripoli to participate in the Airshow of September 1, 2009, celebrating the 40 year during government of president Gaddafi. No way, Libya can be considered as a potential JSF candidate. 5.1.9.11 Morocco Current jet fighter fleet (August 2009) 23x Northrop F-5E 8x Northrop F-5B/F 40x Dassault Mirage F1CH/EH (In 2008 an upgrade ordered) 18x Lockheed Martin F-16C Block 52+ 6x Lockheed Martin F-16D Block 52+ (all F-16s ordered in 2008 [#51.72] for delivery in 2010-2011

Page 78: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 78 of 136

Opportunities Joint Strike Fighter No 5.1.9.12 Oman Current jet fighter fleet (August 2009) 8x Lockheed Martin F-16C Block 50, last delivered in 2008 [#51.76, page 19] 4x Lockheed Martin F-16D Block 50 18x Sepecat (BAe)Jaguar B/GR1/S 1x Sepecat (BAe) Jaguar T2 Opportunities Joint Strike Fighter Oman cannot be considered as a potential JSF buyer. There is an actual requirement to replace the aging Jaguar. Oman has a tradition of buying British fighters. During a visit in Februay 2009 to Oman, Sarkozy aimed to sell Rafale fighter jets to replace Omans aging 20 Anglo-French Jaguars. This was to be a challenge since most Middle East countries buy from the English-speaking world [#51.57]. Oman is also seen by Saab as a potential customer for the Gripen [#51.83]. After replacing the Jaguar, and with the young F-16s in service, Oman will not be in the market until 2040. 5.1.9.13 Qatar Current jet fighter fleet (August 2009) 9x Dassault Mirage 2000-5EDA 4x Dassault Mirage 2000-5DDA Opportunities Joint Strike Fighter No 5.1.9.14 Saudi Arabia Current jet fighter fleet (August 2009) 68x Northrop F-5E/ RF-5E 41x Northrop F-5B /F 66x Boeing F-15C Eagle 18x Boeing F-15D Eagle 71x Boeing F-15S Eagle (variant of F-15E with downgraded avionics) (70 F15S to be upgraded with new GE F110 engines [#51.76]) 22x Panavia Tornado ADV (from 24, in service since 1989 [#51.76]) 83x Panavia Tornado IDS (from 96, batch 1 (48) in service since 1986; batch 2 (48) since 1998) [#51.76]) 72x Eurofighter Typhoon in order (Replacement of Tornado; delivery in progress in 2009-2011 [#51.77]). 72x Boeing F-15SG/SE version negotiated September 2009 [#51.104] Opportunities Joint Strike Fighter Saudi Arabia was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8].

Page 79: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 79 of 136

Saudi Arabia cannot be considered as a near term JSF opportunity after the choice of the Eurofighter to replace the Tornado, the planned upgrade of Boeing F-15S and the replacement of F-15C/D as announced by DodBuzz early September 2009. Only in the long term (late 2020s) Saudi Arabia may be a potential F-35 customer to replace the 70 F-15S, but not without competition with other options. However there may be complications in the area of technology transfer, a sensitive question in relation to the specific US-Israeli relationship. [#51.47] 5.1.9.15 Syria Current jet fighter fleet (August 2009) 10x Mikoyan-Gurevich MiG-15 30x Mikoyan-Gurevich MiG-17 219x Mikoyan-Gurevich MiG-21 145x Mikoyan-Gurevich MiG-23 40x Mikoyan-Gurevich MiG-25 68x Mikoyan-Gurevich MiG-29 5x Mikoyan-Gurevich MiG-31 in order 69x Sukhoi Su-22 20x Sukhoi Su-24 Opportunities Joint Strike Fighter No 5.1.9.16 Tunisia Current jet fighter fleet (August 2009) 12x Northrop F-5E 4x Northrop F-5F This fleet of F-5s in this Western oriented small airforce, ordered in 1977 needs replacement within some years, with several light trainer-attack aircraft and European products mentioned as possible options. Opportunities Joint Strike Fighter No 5.1.9.17 United Arab Emirates Current jet fighter fleet (August 2009) 52x Lockheed Martin F16E Block 60 (2 lost in recent accidents in January and February 2009 [#51.106]) 25x Lockheed Martin F16F Block 60 21x Dassault Mirage 2000 EAD/RAD 37x Dassault Mirage 2000-9 EAD and RAD 2x Dassault Mirage 2000 AD 6x Dassault Mirage 2000-9AD Opportunities Joint Strike Fighter United Arab Emirates was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. However, a deal with France to buy Dassault Rafales seems to be quite certain, the remaining 63 Mirage 2000 to be replaced by 63 Rafales from 2012 on a 1-to-1 basis.

Page 80: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 80 of 136

Contracting said to be under way and to be completed in 2009-2010 [#51.73]. A memory of understanding, signed in October 2008, for use of a permanent French presence underlines the close relationship between both countries [#51.77]. In the summer of 2009 the news was announced that a deal for 60 Rafales would be be finalized end of 2009 [#51.106]. When a deal with France to buy the Rafale will materialise, the Unit Arab Emirates cannot be considered as a JSF opportunity, because the other part of the fighter fleet are young F-16 Block 60 aircraft, with a replacement date in the late 2030s. 5.1.9.18 Yemen Current jet fighter fleet (August 2009) 11 x Northrop F-5E 2 x Northrop F-5B 4 x Mikoyan-Gurevich MiG-15 23 x Mikoyan-Gurevich MiG-21 25 x Mikoyan-Gurevich MiG-23 24 x Mikoyan-Gurevich MiG-29 and 32 more ordered 35 x Sukhoi Su-22 Opportunities Joint Strike Fighter No

Page 81: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 81 of 136

5.1.10 Jet fighter requirements Asia 5.1.10.0 Introduction Lockheed Martin is considering several Asian countries as a near-term or long-term Foreign Military Sales candidate to procure F-35 Joint Strike Fighters [#51.8; #51.14]. The Asian countries identified by Lockheed Martin are India, Japan, Taiwan, Thailand, Singapore and South Korea. However, there is a lot of displaced optimism in the Lockheed Martin sales department, as was shown by Lockheed Martin's President South Asia, Mr. Kirkland, who told Reuters on the sidelines of the Singapore Airshow in February 2008 that Lockheed expects a steady growth in its business across Asia, where it aims to sell at least 500 of its next generation F-35 Joint Strike Fighters. "Our steady markets in Asia are Japan, South Korea, Australia, and Singapore, and we see them as potential buyers of the F-35s," Kirkland said [#51.88]. A simple calculation learns that this would mean 450 aircraft (550 aircraft minus the official Australian number of 100 units). India, Taiwan and Thailand could be ruled out with a near 100% certainty at that moment. So 450 aircraft has to be procured by Singapore (to replace 35 F-5 Freedom Fighters) and a doubting Japan and South Korea. An average of 150 units per country would be possible? This shows the irrealistic marketing expectations of Lockheed Martin about the F-35. Neglecting also the steady development of an own Asian fighter industry in India, Japan and South Korea.

Table 51.18 - JSF Market 2008-2034 Asia

Source: prepared by JOBO

Page 82: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 82 of 136

5.1.10.1 Abkhazia Current jet fighter fleet (August 2009) No jets Opportunities Joint Strike Fighter No 5.1.10.2 Afghanistan Current jet fighter fleet (August 2009) No Opportunities Joint Strike Fighter No 5.1.10.3 Armenia Current jet fighter fleet (August 2009) 1x Mikoyan-Gurevich MiG-25 5x Sukhoi Su-25 Frogfoot-A 9x Sukhoi Su-25K Frogfoot-A 1x Sukhoi Su-25UB Frogfoot-B 1x Sukhoi Su-25UBK Frogfoot-B Opportunities Joint Strike Fighter No 5.1.10.4 Azerbaijan Current jet fighter fleet (August 2009) 5x Mikoyan-Gurevich MiG-21 5x Mikoyan-Gurevich MiG-25 5x Mikoyan-Gurevich MiG-29 11x Sukhoi Su-24 6x Sukhoi Su-25K Frogfoot-A ex-Cezch AF 1x Sukhoi Su-25UBK Frogfoot-B ex-Czech AF Possibly 24 Mikoyan-Gurevich MiG-29 delivered in 2008 [#51.74] Rumours are going 24 Chinese JF17s ordered [#51.74] Opportunities Joint Strike Fighter No 5.1.10.5 Bangla Desh Current jet fighter fleet (August 2009) 20x Shenyang A-5 (MiG-17) 16x Shenyang F-6 (MiG-19) 33x Chengdu F-7 (MiG-21), 1 in order 8x Mikoyan-Gurevich MiG-29

Page 83: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 83 of 136

Opportunities Joint Strike Fighter No 5.1.10.6 Bhutan Current jet fighter fleet (August 2009) No Opportunities Joint Strike Fighter No 5.1.10.7 Brunei Current jet fighter fleet (August 2009) No Opportunities Joint Strike Fighter No 5.1.10.8 Cambodia Current jet fighter fleet (August 2009) 17x Mikoyan-Gurevich MiG-21 Opportunities Joint Strike Fighter No 5.1.10.9 China Current jet fighter fleet Airforce (August 2009) 250x Harbin H-5 (Il-28) 120x Harbin H-6 25x Shenyang J-6 392x Chengdu J-7 96x Shenyang J-8 140x Chengdu J-10 98x Shenyang J-11 (license Su-27) 500x Nanchang Q-5 151x Sukhoi Su-27/Su-30 and 135 more on order Current jet fighter fleet Navy (August 2009) 150x Harbin H-5 (Il-28) 30x Harbin H-6 98x Snenyang J-6 30x Chengdu J-7 124x Shenyang J-8 100x Nanchang Q-5 23x Sukhoi Su-30/33 and 50 more ordered Opportunities Joint Strike Fighter No

Page 84: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 84 of 136

5.1.10.10 Georgia 11xSu25 The number of fighter jets available following the Ossetian War with Russia in August 2008 is unclear. Opportunities Joint Strike Fighter No 5.1.10.11 India Current jet fighter fleet Air Force (August 2009) 119x SEPECAT (HAL) Jaguar M/S; 31x SEPECAT (HAL) Jaguar T 12x SEPECAT (HAL) Jaguar S ordered recently to be license built by HAL 227x Mikoyan-Gurevich MiG-21 97x Mikoyan-Gurevich MiG-23 (all retired since March 2009 [#51.80], still without replacement) 128x Mikoyan-Gurevich MiG-27, considerable number seems to be not longer operational; (40 to be upgraded to extend service [#51.80]) 69x Mikoyan-Gurevich MiG-29 44x Dassault Mirage 2000H 12x Dassault Mirage 2000TH 53x Sukhoi Su-30MKI (177 ordered, licensed by Indian industry, HAL) 20x HALTejas LCA light figter (ordered) Current jet fighter fleet Indian Navy (August 2009) 12x Mikoyan-Gurevich MiG-29K ordered 4x Mikoyan-Gurevich MiG-29KUB ordered 29x additional MiG-29K to be procured [#51.76, page 23]. 14 x Sea Harrier FRS51 Opportunities Joint Strike Fighter On 17-nov-2004 Vice Chief of Air Staff Air Marshall Sumil Kamar stated that in the MRCA (Multi Role Combat Aircraft) requirement there would be no restrictions to companies supplying new fighters to replace the delayed Indian developed LCA Tejas. Mirage 2000, Gripen and MiG-29, also American contenders entered the MRCA competition, including F-16, F/A-18 Super Hornet. The JSF Program Office noticed the opportunities and started pushing the F-35 as an option as well. However important conditions of India are (1) licence production by HAL in India; (2) technology transfer and access to the software; (3) continuous supply of spare parts even if there were sanctions; (4) compensation orders to be placed in India. The global supply chain and complex production and protected technology of the F-35 is conflicting with the possibility of own production in India. This is one of the reasons there is a low probability of an Indian buy of the F-35 (in each case in short term). This was noted already in 2006 by India’s Chief Air Marshal [#51.59] “In February 2006, India’s Chief Air Marshal recently specificaly noted that the JSF was not in their plans for this buy, a likelihood that DID’s analysis had noted earlier due to probable lack of availability before 2015. The August 2007 MRCA RFP confirmed this.” ……….. “The F-35’s killer weakness was timing. Its advanced systems, established industrial partnership structure and program procurement policies could also make it nearly impossible to meet India’s industrial offset rules.”. India was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The 29th of July 2007 Royce Caplinger, the

Page 85: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 85 of 136

managing director of Lockheed Martin India lindicated in on India’s CNN-IBN news channel: “Beyond the (tender) that’s on the horizon, the F-35 too could play a role, sometime in the future.” To sweeten the deal he indicated the JSF could come at the same price as the F-16, realising that in the near term the JSF would have no chance in India. In the long term there are other reasons why the JSF possibilities are low in India. India is developing their own aviation industry. The LCA Tejas is delayed, but investments in own or joint aviation projects have a high priority and about 10-15 years the situation may be changed much. A Russian-Indian memory of understanding between Sukhoi and HAL to develop a new 5th generation fighter (Sukhoi-HAL FGFA Stealth Fighter, #51.109] to be in service in 2015-2017 also conflicts with the procurement of another 5th generation fighter. The already defined global supply chain of the F-35, with huge investments in SDD by several partner countries is another obstacle on the way to joint industrial cooperation or compensation orders. Further the Indian Airforce wants be predominantly using weapons of Indian origin such as Astra, a Beyond Visual Range missile, this can be expected an obstacle when it has to be integrated in the F-35 airframe and software 5.1.10.12 Indonesia Current jet fighter fleet (August 2009) 7x Lockheed Martin F-16A 3x Lockheed Martin F-16B 2x Sukhoi Su-27SK in service since 2003 2x Sukhoi Su-30MKK in service since 2003 3x Sukhoi Su-27SKM ordered, delivery 2008-2012 [#51.69] 3x Sukhoi Su-30MK2 ordered, delivery 2008-2012 [#51.69] Opportunities Joint Strike Fighter No 5.1.10.13 Japan Current jet fighter fleet (August 2009) 43x Mitsubishi F-2A and 20 in order (own Japanese F-16 derivative) 32x Mitsubishi F-2B and 1 in order 91x McDonnel Douglas F/EF-4EJ (some already retired and only 2 squadrons remaining [#51.80]). 26x McDonnel Douglas RF-4EJ (one squadron only) [#51.80] 157x Boeing F-15J 45x Boeing F-15DJ Opportunities Joint Strike Fighter An official Japanese requirement in the F-X program of some 90-100 aircraft exists to replace the F-4EJ Phantoms. Since 2004 the Japanese Defense Agency has received briefings on the F-35 program. One requirement, early delivery around 2011, might be difficult in the delayed F-35 program [#51.66]. Japan was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentioned also a start of the acquisition process in 2008 with Letter of Acceptance procedure starting Summer 2009 and contract finalising early 2010. First F-35As would be delivered for evaluation in early 2012 with a first operational deliveries early 2014 [#51.14]. Still in 2008 Lockheed’s Mr. Standridge said: “The Japanese are now deciding on an RFP and sitting back and watching the F-35 program to gain confidence in the plane, it must be considered by the Japanese, it's just a matter of when.'' [#51.89]. But since not too much progress has been made. Repeatedly

Page 86: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 86 of 136

Japan has expressed to be interested in the F-22 Raptor, and has told the USA, that when the USA won’t deliver F-22s, Japan will consider Eurofighter Typhoons [#51.35] or Boeing F-15SE Silent Eagles [#51.31]. The new government of Yukio Hatoyama of the Democratic Party of Japan, elected in August 2009, may have a more US-independent governance. In the long term the steady development of an own high-tech Japanese aviation and space technology may be a complicating factor. Japan is manufacturing an own derivative of the F-16, the Mitsubishi F-2 and has started developing their own stealth fighter, partly with technical assistance of European companies, the ATD-X design [#51.70]. So, after the F-4E Phantom replacement opportunity, currently in process, new opportunities for the F-35 in Japan will be very uncertain. 5.1.10.14 Kazakhstan Current jet fighter fleet (August 2009) 16x Mikoyan-Gurevich MiG-25 15x Mikoyan-Gurevich MiG-29 42x Mikoyan-Gurevich MiG-31 40x Sukhoi Su-24 14+x Sukhoi Su-25 Frogfoot-A 1x Sukhoi Su-25UB Frogfoot-B 47x Sukhoi Su-27 Flanker Opportunities Joint Strike Fighter No 5.1.10.15 Kyrgyzstan Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.10.16 Laos Current jet fighter fleet (August 2009) 25x Mikoyan-Gurevich MiG-21 Opportunities Joint Strike Fighter No 5.1.10.17 Malaysia A contract for 18 Su-30MKM multifunctional fighters for RMAF was signed during the official visit of Vladimir Putin, then President of Russia, to Malaysia in August 2003. After thorough examination RMAF selected Su-30MKM thus preferring it to US F/A-18 Super Hornet fighter. According to local mass media the decision of Malaysian leadership was largely influenced by India’s successful operation of Su-30MKI. Currently a new fighter evaluation process has been started to replace the F-5E. Current jet fighter fleet (August 2009)

Page 87: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 87 of 136

9x Northrop F-5E/RF-5E (5 more stored) 2x Northrop F-5F 8x Boeing F/A18D 16x Mikoyan-Gurevich MiG-29 and 2 ordered 12x Sukhoi Su-30MKM and 6 ordered Opportunities Joint Strike Fighter No 5.1.10.18 Mongolia Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.10.19 Myanmar (Birma) Current jet fighter fleet (August 2009) 21x Nanchang A-5 Fantan 1x Shenyang F-6 25x Shenyang F-7 4x Soko G4 12x Mikoyan-Gurevich MiG-29 Opportunities Joint Strike Fighter No, Chinese oriented defence material procurement. 5.1.10.19 Nepal Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.10.20 North Korea Current jet fighter fleet (August 2009) 120x Shenyang F-5 98x Shenyang F-6 180x Shenyang F-7 80x Nanchang A5 Fantan (exportversion Q5) 30x Mikoyan-Gurevich MiG-21 56x Mikoyan-Gurevich MiG-23 40x Mikoyan-Gurevich MiG-29 30x Sukhoi Su-7 30x Sukhoi Su-25K Frogfoot-A 4x Sukhoi Su-25UBK Frogfoot-B

Page 88: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 88 of 136

Opportunities Joint Strike Fighter No 5.1.10.21 Pakistan In a September 2009 interview with Air Force Monthly ACM Tanvir of the Pakistanian Air Force (PAF) told about his view on the PAF in 2015: A fleet of 50x Shenyang F-7PG; 240x PAC JF17 Thunder; 60x Lockheed Martin F-16 and 40x FC20 (Chinese J-10B). The old Nanchang A-5, Dassault Mirages and Shenyang F-7s will be replaced by the PAC JF-17. Some 150x JF17 are ordered [#51.107]. Current jet fighter fleet (August 2009) 39x Nanchang A-5 Fantan (exportversion Q-5, derivative of MiG-19) (in service since 1983, in 2009 to be replaced by JF-17) 30x Northrop F-5 144x Shenyang F-7 25x Lockheed Martin F-16A/C (12 in order) 21x Lockheed Martin F-16B/D (6 in order) 8x Pakistan Aeronautical Complex (PAC) JF-17; with 142 more in order 82x Dassault Mirage IIIE 19x Dassault Mirage IIIBE /BL /D /DP 91x Dassault Mirage 5 EF /F /PA 2x Dassault Mirage 5DPA Opportunities Joint Strike Fighter No. After the by USA embargoed deliveries of the F-16, there is a growing cooperation with the Chinese industry (FC20, export variant of Chinese Chengdu J-10B) and development of own industry. The Pakistan Aeronautical Complex material started in 2009 with full production of the JF-17. PAC plans to produce 12 aircraft in 2010 and 15-16 aircraft per year from 2011. This may eventually be increased to 25 aircraft per year, using a mixed use of Chinese aircraft technology, Russian engines and latest Western (French) electronics and weapons [#51.103] . 5.1.10.22 Papua New Guinea Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.10.23 Philippines Current jet fighter fleet (August 2009) No jet fighter, only 11x OV-10 Bronco counter insurgency aircraft. Opportunities Joint Strike Fighter No

Page 89: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 89 of 136

5.1.10.24 Singapore Current jet fighter fleet (August 2009 7x McDonnel Douglas A-4SU Skyhawk (to be retired in 2010 [#51.78]) 14x McDonnel Douglas TA-4SU Skyhawk twoseat (to be replaced by M346, KAI T50 or Hawk Mk.128 [#51.69]) 35x Northrop F/RF-5S 24x F-15SG in order from june 2009 replacement of A-4 and some of the F-5s Using Korean and Israelian components [#51.78]. 61x F-16C Block 52 and F-16D Block 52 being delivered between 1998-2004 Opportunities Joint Strike Fighter In 2004 it was announced that Singapore would be a Security Cooperation Partner in the SDD stage of the F-35, giving Singapore the opportunity to buy the F-35 from 2012. At that moment the F-35 was the favourite to replace the A-4SY Skyhawks, but later the F-15SG Eagle has been chosen, limiting the possibilities of a large sale of F-35s to Singapore [#51.65]. Singapore was still identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentioned a start of the acquisition process in 2007 with Letter of Acceptance procedure in 2011 and contract finalising in 2012. First F-35As would be delivered in early 2014 [#51.14]. The facts show this time schedule is commercial wishful thinking, however the F-35 may be considered as a favourite to replace the 35 F-5 Freedom Fighters. However other contenders may be new F-16s, the Boeing F-15SG of F-15 Silent Eagle and also several European options are being considered [#51.31 en #51.38]. 5.1.10.25 South Korea Current jet fighter fleet (August 2009) 138x F-4D and RF-4C (some 40 more stored) 196x Norhtrop F-5E and F-5F Tiger II 39x Boeing F-15K, last delivered in 2008 21x Boeing F-15K in order for delivery in 2010-2012 (KAI produces components) 28x Lockheed Martin F-16C Block 32 (1986-1992) 8x Lockheed Martin F-16D Block 32 (1986-1992) 90x Lockheed Martin F-16C Block 52 (1994-2004) 43x Lockheed Martin F-16D Block 52 (1994-2004) 25x Korean Aircraft Industry (KAI) T-50 with 60 more in order Opportunities Joint Strike Fighter South Korea was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. The presentation mentioned also a start of the acquisition process in 2012 with Letter of Acceptance procedure in 2013 and contract finalising early 2014. First F-35As would be delivered in 2016 [#51.14]. However, the facts show this is commercial wishful thinking. There would be several opportunities for the F-35: replacement of the F-5E, F-4D and early F-16s. Recent three developments have minimized the F-35 short term opportunities. First development is in the process of the replacement of the F-5E and some of the F-4Ds there is a local rival, the own Korean KAI FA50. KAI is developing the FA-50 light attack plane (version of the existing T50), with early 2009 the announcement of a first potential order of 60 aircraft and production start in 2013; with an option for 90 more; to replace the existing A37, Northrop F-5E Tiger II and F-4D Phantom II ground attack aircraft. KAI is working in cooperation with Elbit (Israël).

Page 90: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 90 of 136

Second development is the successful introduction of the Boeing F-15 Eagle in South Korea. After the initial procurement (signed in april 2002) of 40 Boeing F-15Ks (F-X Stage I), in 2008 a new contract has been signed to procure another 21 Boeing F-15Ks (F-X Stage II). With a strong desire to buy more F-15 Eagles for F-X Stage III. The introduction in the market of the Boeing F-15SE (stealthy) Silent Eagle is a further attack at the market possibilities of the F-35 JSF (March 2009) [#51.31, #51.44]. South Korea has a requirement for 60 fighters in the F-X Stage III program after 2012, but funding is a bottleneck. Third development is that South Korea wants to develop their own defense and aviation industry with the development of an own fighter (Project KFX). Last July 2009 the signing of a defense trade MoU between Sweden and South Korea with Saab as a possible development partner in the development is one of the latest developments. In September 2009 the government announced to focus in the “KFX” program on a 4,5 generation fighter [#51.114]. Official report recommend “As many as 250 KFXs can be built to push down the unit cost. The first 120 aircraft would replace the country’s McDonnell Douglas F-4 Phantoms and Northrop F-5 Tigers. A further 130 KFXs would replace Lockheed Martin F-16C and D Block 52s. If KFX costs $41 million a copy, South Korea might export 300-500 to countries such as Indonesia and Turkey, it suggests. Indonesia signed a letter of intent with South Korea to participate in the KFX study last March.” [#51.114]. The active marketing of the KAI T-50/FA50 at the world market is showing the Korean long-term intentions. A stronger own industry will be a possible restriction to the long term opportunities of the F-35 in South Korea, when (in 2020-2025) there will be a need to replace the F-16s. 5.1.10.26 Sri Lanka Current jet fighter fleet Air Force (August 2009) 6 x Shenyang F-7 (#51.71) 8 x IAI Kfir 1 x Mikoyan-Gurevich MiG-23 4 x Mikoyan-Gurevich MiG-27 Current jet fighter fleet Navy (August 2009) 4 x Mikoyan-Gurevich MiG-29SM 1 x Mikoyan-Gurevich MiG-29UB (delivery completed in September 2008 [#51.76 page 23]. Opportunities Joint Strike Fighter No 5.1.10.27 Taiwan (Republic of China) Current jet fighter fleet (August 2009) 219 x Northrop F-5E, F-5F and RF-5E 117 x Lockheed Martin F-16A (since 1992) 28 x Lockheed Martin F-16B 101 x AIDC F-CK-1A Ching-kuo 25 x AIDC FCK-1B Ching-kuo 47 x Mirage 2000-5EI 10 x Mirage 2000-5DI Opportunities Joint Strike Fighter

Page 91: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 91 of 136

Taiwan first expressed an interest in F-35s as early as 2006, according to Jane's Defence Weekly. Taiwan was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. There is a requirement to get some 50 units in the near term and 50 in the long term, but the relationship with the People Republic of China and the tensions between the USA and China about Taiwan are blocking a possible deal to deliver the latest generation of high-tech miltiiary products to Taiwan [#51.61]. In the past the USA refused a request for 66 less advanced F-16 fighters, fearing a critical reaction from Beijing [#51.87], so blocking the Initial funding of 66 F16C/Ds for clear political reasons. Taiwan has requested to buy the F-35 from the US. However this also has been rejected by the US in fear of a critical response from Beijing. In March 2009 Taiwan again was looking to buy U.S. fifth-generation fighter jets featuring stealth and vertical takeoff capabilities. During a meeting on September 30, 2009 of the U.S. Taiwan Business Council in Charlottesville, Virginia, USA Wallace “Chip” Gregson, the assistant secretary of defense for Asian and Pacific security affairs, said that “true and lasting security cannot be achieved simply by purchasing the next gleaming piece of advanced hardware,” arguing that the self-governing island can significantly improve its defenses by better utilizing what it already has. A clear sign about the JSF opportunities in Taiwan. Also, Taiwan is developing an own aviation industry with the light fighter FCK-1A (126 ordered) as a replacement for the aging Northrop F-5 Tiger. In the past there were good contacts with France, resulting in the procurement of the Mirage 2000, so the procurement of Rafales cannot be ruled out in the future. Conclusion: in the near term Taiwan cannot be considered as a JSF opportunity, in the long term the own aviation industry and relationship with Europe may be threatening the JSF opportunities. 5.1.10.28 Tajikistan Current jet fighter fleet (August 2009) Small AF; No fighters Opportunities Joint Strike Fighter No 5.1.10.29 Thailand Current jet fighter fleet (August 2009) 56 x Northrop F-5A /B /E /F 42x Lockheed Martin F-16A (2 more in storage) 6x Saab JAS39C/D Gripen in order, with 6 more in option 7x McDonnel-Douglas AV-8S Harrier (no longer operational, in storage) 2x McDonnel-Douglas TAV-8S Harrier (no longer operational; in storage) Opportunities Joint Strike Fighter Thailand was identified by Lockheed Martin officials as one of the possible buyers in presentations to the industry in 2007 [#51.8]. In 2008 Thailand signed a contract with Saab to purchase 6 JAS-39C/D Gripens with an option to buy 6 more and possibly with more future requirements. However there are important budget restrictions and the option to buy 6 has been postponed. So, a solid base for a future F-35 JSF purchase doesn’t seem to be present. The simple fact that Thailand is an Harrier operator and the F-35B STOVL version is the only possible Harrier replacement is no reason to consider Thailand as a future F-35 operator. In fact the Harriers are not longer operational and put in storage.

Page 92: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 92 of 136

5.1.10.30 Turkmenistan Current jet fighter fleet (August 2009) 3x Mikoyan-Gurevich MiG-21 58x Mikoyan-Gurevich MiG-23 24x Mikoyan-Gurevich MiG-25 24x Mikoyan-Gurevich MiG-29 3x Sukhoi Su-7 65x Sukhoi Su-17 20+ Sukhoi Su-25 Frogfoot-A 2+ Sukhoi Su-25UB Frogfoot-B 1+ Sukhoi Su-25KM Scorpion Opportunities Joint Strike Fighter No 5.1.10.31 Uzbekistan Current jet fighter fleet (August 2009) 39x Mikoyan-Gurevich MiG-29 30x Sukhoi Su-17 15+ Sukhoi Su-25 Frogfoot-A 1+ Sukhoi Su-25UB Frogfoot-B 30x Sukhoi Su-27 Flanker Opportunities Joint Strike Fighter No 5.1.10.32 Vietnam Current jet fighter fleet (August 2009) 147x Mikoyan-Gurevich MiG-21 39x Sukhoi Su-22 12x Sukhoi Su-27SK Flanker B 3x Sukhoi Su-27UBK Flanker C 4x Sukhoi Su-27MK2V 12x Sukhoi Su-30MK2V ordered for delivery in 2010 [#51.106] Opportunities Joint Strike Fighter No

Page 93: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 93 of 136

5.1.11 Jet fighter requirements Latin America 5.1.11.0 Introduction The history of arms embargoes, the support in the past of several former dictators in Latin America by the USA is a restricting factor for the USA in the sales of weapons to Latin America. Just even Lockheed Martin is not considering any Latin American country as a near-term or long-term Foreign Military Sales candidate to procure some F-35 Joint Strike Fighters [#51.8; #51.14]. 5.1.11.1 Argentina Current jet fighter fleet Air Force (August 2009) 22 x A-4R “Fighting Hawk” (Skyhawk); 7 more stored 4x TA-4R 6 Mirage IIIEA, 1 more stored 2 Mirage IIIDA 7 Mirage 5P 13 IAI Nesher (Mirage variant) Current jet fighter fleet Navy (August 2009) 11 Dassault Super Etendard Opportunities Joint Strike Fighter There is a future fighter requirement to replace the old 2nd and 3rd generation fighters, however there are important budget constraints. Argentina cannot be considered as a F-35 candidate [#51.83]. 5.1.11.2 Bahamas Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.3 Belize Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.4 Bolivia Current jet fighter fleet (August 2009) No fighters. Modernisation plans revealed in early 2009; but there are no any plans to procure fighters [#51.79] Opportunities Joint Strike Fighter No

Page 94: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 94 of 136

5.1.11.5 Brazil Brazil is a fast growing economy, but with a relatively small and old jet fighter fleet. In the past purchases were done in Europe and the USA. In 2005 the FX program was abandoned due to lack of budgets. A new (replacing) F-X2 program was announced. Brazil issued a Request for Information for the F-X2 program on 12-jun-2008 with a stated initial requirement for 36 aircraft with a first in service date in 2014, in longer term growing to a possible 120 fighters to replace AMX-A1M, Northrop F-5s and Dassault Mirage 2000 [#51.77]. Last contenders in the F-X2 program are Boeing F/A Super Hornet, Dassault Rafale and Saab Gripen NG. The Lockheed Martin F-16BR and Sukhoi Su-35 are not longer at the F-X2 shortlist. On 08-sep-2009 France announced during the visit of President Sakozy to Brazil that Brazil preferred the Dassault Rafale with negotations to start about an order of 36 aircraft and an option for 84 more, including industrial cooperation and transfer of technology. Early 2010 the final outcome in the F-X2 program will be known. Current jet fighter fleet (August 2009) 52x AMX-A/T (joint Italian-Brazilian product) 50x Northrop F-5 E /F /M (upgraded by Israeli industry from 2007) 10x Dassault Mirage 2000C used fighters, ex-France, in service 2007-2008 (#51.73) 2x Dassault Mirage 2000B, ex-France, 2007. Current jet fighter fleet Navy (August 2009) 9 McDonnel Douglas A-4 Skyhawk (11 more in storage) 2 McDonnel Douglas TA-4 Skyhawk (1 more in storage) A Skyhawk upgrade program with assistance of Israeli industry had been announced in 2009 to upgrade this Vietnam-era fighters. Opportunities Joint Strike Fighter In the past F-X campaign Lockheed Martin had been planning to offer the F-35, but in the later F-X2 campaign Lockheed Martin offered a special tailored F-16BR version instead. Reason not to offer the F-35 any longer may be the delay in the F-35 program, which makes a 2014 delivery date quite impossible, but also Brazil requires transfer of all technology needed to maintain the aircraft as part of any F-X2 contract [#51.75, p.20]. Another factor is the requirement for important industrial involvement of the Brazilian industry. After completion of the F-X2 fleet renewal there will be no additional requirement for decades, so there is no F-35 market in Brazil any longer. 5.1.11.6 Chile Current jet fighter fleet (August 2009) 14x Northrop F-5E 3x Northrop F-5F 11x Lockheed Martin F-16AM (ex-RNLAF in 2006/2007, Mid-Life-Updated) 7x Lockheed Martin F-16BM (ex-RNLAF in 2006/2007, Mid-Life-Updated) 6x Lockheed Martin F-16C Block 50 (new) [#51.77] 4x Lockheed Martin F-16D Block 50 (new) [#51.77] A further requirement has been defined to replace the old Northrop F-5E and F-5F fighters. A Request for Information (RFI) to buy an additional 10 Lockheed Martin F-16C/D Block 50s for delivery in 2010-2012 is in process. Also in May 2009 a contract has been signed with The Netherlands to procure a further batch of 18 recently upgraded F-16AM fighters. [#51.106]. After completion of this fleet renewal there will be no additional requirement for decades. Opportunities Joint Strike Fighter No

Page 95: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 95 of 136

5.1.11.7 Colombia Current jet fighter fleet (August 2009) 11x IAI Kfir [#51.107] recently upgraded 11x Dassault Mirage 5COA (1 lost 15-may-2009 [#51.106]) 2x Dassault Mirage 5COD Opportunities Joint Strike Fighter No 5.1.11.8 Costa Rica Current jet fighter fleet (August 2009) There is officially no Air Force of Costa Rica, the only air wing in existence is attached to the Ministry of Public Security Opportunities Joint Strike Fighter No 5.1.11.9 Cuba Current jet fighter fleet (August 2009) 183x Mikoyan-Gurevich MiG-21 69x Mikoyan-Gurevich MiG-23 20x Mikoyan-Gurevich MiG-29 Opportunities Joint Strike Fighter No 5.1.11.10 Dominican Republic Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.11 Ecuador Current jet fighter fleet (August 2009) 9x IAI Kfir 13x Dassault Mirage F1JA 1x Dassault Mirage F1JE There will be a need for replacement of the Mirage F1 in the next ten years [#51.83]. Opportunities Joint Strike Fighter No

Page 96: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 96 of 136

5.1.11.12 El Salvador Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.13 Guatemala Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.14 Guyana Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.11.15 Haiti Current jet fighter fleet (August 2009) No armed forces (demobilized); Police force only. Opportunities Joint Strike Fighter No 5.1.11.16 Honduras Current jet fighter fleet (August 2009) 9x Northrop F-5E since 1989 2x Northrop F-5F since 1989 Opportunities Joint Strike Fighter No 5.1.11.17 Jamaica Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No

Page 97: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 97 of 136

5.1.11.18 Mexico Current jet fighter fleet (August 2009) 10x Norhtrop F-5E and F-5F Opportunities Joint Strike Fighter No 5.1.11.19 Nicaragua Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.20 Panama Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.21 Paraguay Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.22 Peru Current jet fighter fleet (August 2009) 19x Mikoyan-Gurevich MiG-29 (contract to upgrade in 2008 to extend their service until 2028 [#51.75]) 10x Dassault Mirage 2000P (upgrade contract 2009 [#51.78]) 2x Dassault Mirage DP twin-seat 17x Sukhoi Su22 9x Sukhoi Su-25K Frogfoot-A 8x Sukhoi Su-25UBK Frogfoot-B Opportunities Joint Strike Fighter Russian and European oriented material procurement. No F-35 candidate. 5.1.11.23 Barbados Current jet fighter fleet (August 2009)

Page 98: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 98 of 136

No real airforce present Opportunities Joint Strike Fighter No 5.1.11.24 Suriname Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.25 Trinidad & Tobago Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.26 Uruguay Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.11.27 Venezuela Current jet fighter fleet (August 2009) 3x Lockheed Martin F-16A and 14 in storage 2x Lockheed Martin F-16B and 2 in storage 10x Northrop VF-5A 3x Northrop NF-5B/VF-5B 24x Sukhoi Su-30MKV2 12x Dassault Mirage 5OEV retired from service in July 2009 [#51.107, p.25] 3x Dassault Mirage 5ODV retired from service in July 2009 [#51.107, p.25] Opportunities Joint Strike Fighter Material procurement oriented at Russia and China since Mr. Chavez is president. Embargoed by USA, so no F-35 candidate.

Page 99: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 99 of 136

5.1.12 Jet fighter requirements Africa 5.1.12.0 Introduction African countries have small budgets, low national income and sometimes instable political structures, these factors are an important restrictionsfor the USA to sell weapons to Africa. Just even Lockheed Martin is not considering any of these African countries as a near-term or long-term Foreign Military Sales candidate to procure some F-35 Joint Strike Fighters [#51.8; #51.14]. A rapid growing sales of Chinese weapons to Africa (paid with raw materials for the Chinese industry) is a factor in the power balance between countries in Africa. 5.1.12.1 Angola Current jet fighter fleet (August 2009) 24x Mikoyan-Gurevich MiG-21 22x Mikoyan-Gurevich MiG-23 13x Sukhoi Su-22M-4K 2x Sukhoi Su-22UM-3K since the 90s (to be overhauled in Poland, contracted 2007 [#51.69]) 10+ Sukhoi Su-25K Frogfoot-A 3x Sukhoi Su-25UBK Frogfoot-B Opportunities Joint Strike Fighter No 5.1.12.2 Benin Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.3 Botswana Current jet fighter fleet (August 2009) 10x Northrop F-5E 3x Northrop F-5F Opportunities Joint Strike Fighter No 5.1.12.4 Burkina Faso Current jet fighter fleet (August 2009) No fighters. Opportunities Joint Strike Fighter No 5.1.12.5 Burundi

Page 100: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 100 of 136

Current jet fighter fleet (August 2009) No fighters. Opportunities Joint Strike Fighter No 5.1.12.6 Cameroon Current jet fighter fleet (August 2009) No fighters. Opportunities Joint Strike Fighter No 5.1.12.7 Central African Republic Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.8 Chad Current jet fighter fleet (August 2009) 5x Sukhoi Su-25 Frogfoot-A (acquired mid-2008) 1x Sukhoi Su-25UB Frogfoot-B (acquired mid-2008) Opportunities Joint Strike Fighter No 5.1.12.9 Comores Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.10 Congo Current jet fighter fleet (August 2009) Current status of all aircraft uncertain, with the large majority kept in storage. 1x Mikoyan-Gurevich MiG-15 8x Mikoyan-Gurevich MiG-17 12x Mikoyan-Gurevich MiG-21 8x Sukhoi Su-25 Frogfoot-A 1x Sukhoi Su-25UB Frogfoot-B

Page 101: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 101 of 136

Opportunities Joint Strike Fighter No 5.1.12.11 Congo (Democratic Republic) Current jet fighter fleet (August 2009) 2x Mikoyan-Gurevich MiG-23 6x Dassault Mirage 5M 5.1.12.12 Côte d’Ivoire (Ivory Coast) Current jet fighter fleet (August 2009) Complete airforce (Sukhoi Su-25 fighters) destroyed by French troops in November 2004. May be 2x Mikoyan-Gurevich MiG-23 has survived. Opportunities Joint Strike Fighter No 5.1.12.13 Djibouti Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.14 Equatorial Guinea Current jet fighter fleet (August 2009) 2x Sukhoi Su-25 Frogfoot-A 2x Sukhoi Su-25UB Frogfoot-B Opportunities Joint Strike Fighter No 5.1.12.15 Eritrea Current jet fighter fleet (August 2009) 5x Mikoyan-Gurevich MiG-29 6x Sukhoi Su-27 Opportunities Joint Strike Fighter No 5.1.12.16 Ethiopia Current jet fighter fleet (August 2009) 15x Mikoyan-Gurevich MiG-17 35x Mikoyan-Gurevich MiG-21

Page 102: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 102 of 136

10x Mikoyan-Gurevich MiG-23 8x Sukhoi Su-25TK Frogfoot-C 14x Sukhoi Su-27 Flanker Opportunities Joint Strike Fighter No 5.1.12.17 Gabon Current jet fighter fleet (August 2009) 7x Dassault Mirage 5G 4x Dassault Mirage 5DG 4x Dassault Mirage F1 5.1.12.18 Gambia Current jet fighter fleet (August 2009) 1x Sukhoi Su-25 Frogfoot-A Opportunities Joint Strike Fighter No 5.1.12.19 Ghana Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.20 Guinea Current jet fighter fleet (August 2009) 1x Mikoyan-Gurevich MiG-15 4x Mikoyan-Gurevich MiG-17 3x Mikoyan-Gurevich MiG-21 Opportunities Joint Strike Fighter No 5.1.12.21 Guinea-Bissau Current jet fighter fleet (August 2009) 1x Mikoyan-Gurevich MiG-15 Opportunities Joint Strike Fighter No 5.1.12.22 Kenya

Page 103: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 103 of 136

Current jet fighter fleet (August 2009) 13x Northrop F-5E (ex Jordan AF [#51.74]) 2x Norhtrop F5F (ex Jordan AF) Opportunities Joint Strike Fighter No 5.1.12.23 Lesotho Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No 5.1.12.24 Liberia Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.25 Madagaskar Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.26 Malawi Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.27 Mali Current jet fighter fleet (August 2009) 9x Mikoyan-Gurevich MiG-21 Opportunities Joint Strike Fighter No 5.1.12.28 Mauritania

Page 104: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 104 of 136

Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.29 Mozambique Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.30 Namibia Current jet fighter fleet (August 2009) 6x Shenyang F-7 (and 8 more of these Chinese fighters ordered) Opportunities Joint Strike Fighter No 5.1.12.31 Niger Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.32 Nigeria Current jet fighter fleet (August 2009) 12x Chinese F-7 ordered Opportunities Joint Strike Fighter No 5.1.12.33 Rwanda Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.34 Senegal Current jet fighter fleet (August 2009)

Page 105: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 105 of 136

No jet fighters Opportunities Joint Strike Fighter No 5.1.12.35 Sierra Leone Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.36 Somalia Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.37 Seychelles Islands Current jet fighter fleet (August 2009) Small airforce without jets Opportunities Joint Strike Fighter No 5.1.12.38 South Africa Current jet fighter fleet (August 2009) 26x Saab JAS39C and D (to be delivered between 2008 and 2012) Opportunities Joint Strike Fighter No. 5.1.12.39 Sudan Current jet fighter fleet (August 2009) 3x Nanchang A-5 Fantan (export version of Q-5; 12 were delivered since 2003) 5x Shenyang F-5 8x Shenyang F-6 20x Shenyang F-7 5x Mikoyan-Gurevich MiG-21 3x Mikoyan-Gurevich MiG-23 9x Mikoyan-Gurevich MiG-29SE 2x Mikoyan-Gurevich MiG-29UB; (12 more used MiG-29s purchased [#51.74])

Page 106: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 106 of 136

7x Sukhoi Su-25 Frogfoot-A 1x Sukhoi Su-25UB Frogfoot-B Opportunities Joint Strike Fighter No 5.1.12.40 Swaziland Current jet fighter fleet (August 2009) No jet fighters Opportunities Joint Strike Fighter No 5.1.12.41 Tanzania Current jet fighter fleet (August 2009) 8x Shenyang F-5 (J-5) 8x Shenyang F-6 11x Shenyang F-7 Opportunities Joint Strike Fighter No 5.1.12.42 Togo Current jet fighter fleet (August 2009) No fighter jets Opportunities Joint Strike Fighter No 5.1.12.43 Zambia Current jet fighter fleet (August 2009) 8x Shenyang F-6 2x Soko J-1 Jastreb 15x Mikoyan-Gurevich MiG-21 Opportunities Joint Strike Fighter No 5.1.12.44 Zimbabwe Current jet fighter fleet (August 2009) 7x Shenyang F-7 3x Mikoyan-Gurevich MiG-23 Opportunities Joint Strike Fighter No

Page 107: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 107 of 136

5.1.13 Jet fighter requirements Rest of World 5.1.13.1 Australia Opportunities Joint Strike Fighter Australia is one of nine JSF partner countries. In paragraph 5.1.7.1 a full description can be found. 5.1.13.2 Canada Opportunities Joint Strike Fighter Canada is one of nine JSF partner countries. In paragraph 5.1.7.2 a full description can be found. 5.1.13.3 New Zealand In 2001 the Labour government completely removed the Royal New Zealand Air Force fighter capability by cancelling the purchase of 28 Block 15 F-16 Fighting Falcon fighters and disbanding all fighter squadrons with McDonnel Douglas A-4 Skyhawks. Current jet fighter fleet (August 2009) No fighters Opportunities Joint Strike Fighter No

Page 108: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 108 of 136

5.1.14 Reference list #51.1 PriceWaterhouseCoopers; 07-Jul-2008; Report Ministerie van Economische Zaken; Report “The effects of participation in the Joint Strike Fighter program” #51.2 Media briefing “F-35 Joint Strike Fighter Aircraft Media Briefing on Capabilities” by Colonel Dwyer Dennis, JSF Program Office (US) in Australia on 19-Aug-2002. Present were also AVM Ray Conroy (Leader Australian negotations), AirCommodore John Harvey (Leader Integrated Project Team). #51.3 Document “Analyse Business Case parameter 4500 JSF’s”, subtitled “Marktanalyse Joint Strike Fighter 2001 en 2008”, versieon 1.0, author Johan Boeder, send on 30-Aug-2008 to the Standing Committees of Defense and Economical Affairs in the Dutch Lower House and the parlementary press in The Netherlands. #51.4 Report of the Commissaris Militaire Productie (DG I&D) of the Ministry of Economical Affairs, The Netherlands, 03-Oct-2000. #51.5 Report aboot the JSF Production perspective in The Netherlands by Booz-Allen & Hamilton, March 2001. #51.6 Complimentary Report to the ‘Report Steering Board Replacement F-16 of 02-Nov-2001’ of the Interdepartemental Steering Board Replacement F-16, 23-Jan-2002. #51.7 JSF Program Office; MOU-PSFD February 2007, annex A “Estimated JSF air vehicle procurement quantities” and Annex A, april 2007 revision. See at the end of this report Appendix 5.1.A.1 and Appendix 5.1.A.2 #51.8 Power Point Presentation Lockheed Martin and the JSF Program Office as used during 2007 at several international briefings and conferences. Example: F-35 Joint Strike Fighter Support Equipment Conference 2007 – A Program View (Dale Hensley, Lockheed Martin) slide 8 and 9.

Page 109: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 109 of 136

#51.8 (continued, Power Point Presentation Lockheed Martin 2007)

#51.9 Letter 13-Dec-2001 of Lockheed Martin to the Dutch Ministy of Economical Affairs about the industrial opportunities of the JSF Program. #51.10 Internal Report 19-Dec-2001 of the journey to Lockheed Martin by Dutch Defence Secretary of State Mr. Van Hoof to the Minister of Economical Affairs. #51.11 Press Bulletin Lockheed Martin “Global F-35 coalition builds unique collaboration network” November 2006. “As many as 5,000 aircraft with at least three design variants with goals include unprecedented design/build cycle reductions, lowest cost of sustainment for 30-year life of fleet.” #51.12 AirForcesMonthly, “News, all the world’s military aviation news, by region”; 1995 until 2001. #51.13 AirForcesMonthly, “News, all the world’s military aviation news, by region”; January 2002 until February 2009.

Page 110: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 110 of 136

#51.14 Power Point Presentation Lockheed Martin and the JSF Program Office as used during 2007 at several international briefings and conferences. Example: F-35 Joint Strike Fighter Support Equipment Conference 2007 – A Program View (Dale Hensley, Lockheed Martin) slide 8 and 9.

#51.15 US Navy Times; 15 maart 2008; “Navy JSF overruns” http://www.navytimes.com/news/2008/03/navy_jsf_overruns_080315w/ #51.16 UK Defence Budget Debate and UK Parliament questions November/December-2008 #51.17 Eric Palmer; 2 april 2008; “Where is the 1763rd F-35 for USAF?” Link: http://worldwidewarpigs.blogspot.com/2008/04/where-is-1763rd-f-35-for-usaf_02.html See at the end of this report Appendix 5.1.A.1 to Appendix 5.1.A.4, recalculation of “funded only” procurement of F-35As US Air Force. #51.18 TRANSCRIPT OF MEETING 05-FEB2007 with US Secretary.of Defense Gates, February 2007. Presenters Pentagon: Secretary of Defense Robert Gates, Under Secretary of Defense Comtroller Tina Jonas and Director, Force Structure, Resources and Assessment for the Joint Staff, Vice Adm. Steve Stanley. QUESTION JOURNALIST: “A question on JSF, and then I have a quick follow-up. The Air Force is briefing that the ramp-up for JSF is going to plateau at 48 airplanes instead of 110, which would have a net effect on the per- UNIT cost of the aircraft. What are your concerns with that program's costs spiraling upward as a result of fiscal decisions you're making now? I do have a follow-up, as well. ADM. STANLEY: The details of the ramp for the Joint Strike fighter I'll have to refer you to the Air Force on. QUESTION JOURNALIST: “They indicated it would plateau at 48 .”

Page 111: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 111 of 136

MS. JONAS: “I think we do have the Air Force here, so you can follow up with them, the

breakout.”

Comments: Both Pentagon speakers did not deny the “48 number” and didn’t attempt to

correcting the question, but tried to move the question to someone else.

#51.18b Airforcetimes.com; 24-feb-2007; Bruce Rolfsen; title “Air Force 2008 budget likely to be steady.” Subtitle: “Aircraft purchases trimmed, operational goals pushed back.”

Link: http://www.airforcetimes.com/news/2007/02/AFbudget070202/

“The F-35 Lightning II program stays in development, but instead of buying 110 of the jets annually starting around 2013, the Air Force will limit its yearly purchase to 48 of the stealthy jets.” #51.18c Airforce Association Magazine; USA; February 2008 Link: http://www.afa.org/magazine/feb2008/0208watch.asp "...However, USAF is also struggling to fund the F-35 fighter. It needs to build 110 per year to replace the F-16 in a timely manner, but can only afford 48 per year in its budget . And: “Lt. Gen. Raymond E. Johns Jr., deputy chief of staff for plans and programs, said accelerating the F-35 isn’t a viable option because that would introduce additional risk in the program, which has a carefully laid-out development and production plan. “I can only ramp up the F-35 ... as it matures,” Johns said. “I can’t pump it up artificially.”" #51.18d Reuters; 12-aug-2009; “Lockheed's F-35 may be flying into budget storm” “The Pentagon may want to consider scaling back Lockheed Martin Corp's multinational F-35 fighter program, the costliest-ever U.S. arms-purchase plan, as part of stepped-up budget belt-tightening, an analysis by an influential research group said. The private Center for Strategic and Budgetary Assessments, several of whose one-time experts are now serving in senior Obama administration jobs, cited the F-35 as just one example of programs ripe for review by the Department of Defense during its once-every-four-year, top-to-bottom re-assessment now under way. "Rather than buying both new long-range bombers and thousands of short-range F-35 fighters, DoD might consider whether the new bombers ... could represent a cost-effective substitute for some number of these new fighters," said the CSBA analysis, of President Barack Obama fiscal 2010 budget request. The CSBA analysis was released on Wednesday, Moreover, the use of unmanned systems "could enable a radically different force structure that achieves the same level of effectiveness at a much lower cost," added the report by the center's Todd Harrison. Harrison was tapped this year to replace the CSBA's long-time defense budget analyst, Steven Kosiak, who now oversees defense spending at the White House Office of Management and Budget. Kosiak, along with the center's Barry Watts, voiced similar concerns in a 2007 CSBA report, concluding a decision on the F-35's future should be reached "sooner rather than later." The new CSBA report said funding for weapons acquisition was projected to remain flat over the next five years and that, based on the past, "current plans are likely to prove substantially more costly to execute than assumed by the administration."

Page 112: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 112 of 136

#51.18e Los Angeles Times; 27-jul-2005; Mark Mazzetti; ”Pentagon May Scrap Jet Plans” Link: http://articles.latimes.com/2005/jul/27/nation/na-airforce27 “The F-35 Joint Strike Fighter and the F/A-22 programs could be cut in budget moves and as strategies shift to meet unconventional threats. A Pentagon decision to scale back the programs would be the strongest signal yet of a significant change in strategic priorities. With Defense Secretary Donald H. Rumsfeld trying to transform the military to deal with unconventional threats, many say that weapons built for dogfights and eluding enemy radar are increasingly irrelevant. "What does Al Qaeda's air force look like?" said one defense official working on the Pentagon's assessment, known as the Quadrennial Defense Review Although Pentagon officials contend that no final decision has been made about the fate of the two Lockheed Martin-designed jets, some inside the Defense Department say that the deepest cuts could come in the Joint Strike Fighter program. According to one source, the Pentagon could cut the Air Force's allotment of the planes by half. "The JSF sits at the top of that list." #51.19 Bloomberg, 22-Jul-2008 “Schwartz, nominated to be the service’s chief of staff, disclosed during his confirmation hearing Tuesday before the Senate Armed Services Committee that the Pentagon has added $5 billion annually for aircraft and weapons to its six-year plan. "Our priority is to bring F-35s into the Air Force as quickly as possible," Schwartz said in written answers to questions posed by the committee. The money "will in part be used to increase annual F-35 production rate," he wrote. Boosting F-35 production to as high as 110 per year from 48 "is the major strategy" for addressing an anticipated shortfall in fighters as the F-16 is retired, Schwartz said. — Bloomberg News #51.20 Questions Dutch Lower House members Van Velzen and Gerkens, 21-Nov- 2007, question 7: “Do you know the statement of General Johns that the US of America within the actual situation financially are not able to procure more than 48 JSFs pro year…..” Answer Dutch Secretary of State of Defense Mr. Van de Knaap: “No. Recently the US has reported the partners their number of 2.443 JSF aircraft will not be changed” #51.21 Questions Dutch Lower House about Year Report 2007 Project Replacement F-16. Question 92 (partial) “What about the American decision to decrease their procurement during the period 2015-2023 from 110 tor 48 units F-35A?” Answer Secretary of State Mr. Jack de Vries: “There is no way a decision of the United States to decrease the number during the period 2015 to 2023 from 110 tor 48 aircraft per year.” #51.22 Example International Herald Tribune 16 juni 2003 “Key mission for F-35: savings” #51.23 Example, press bulletin Alcoa; 12-Oct-2007; “Alcoa Awarded $360 Million Contract by Lockheed Martin to Provide Aluminum Forgings on F-35 Joint Strike Fighter Program” “It is projected that more than 4,000 Lightning IIs will be ordered by the United States and international forces.”

Page 113: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 113 of 136

#51.24 Example. pressbulletin Terma; 6-Mar-2009 “Terma secures F-35 Joint Strike Fighter Contract” : “Lockheed Martin expects to manufacture more than 3,000 F-35 aircraft, and when full-rate production is initiated in 2015, Lockheed Martin will manufacture one F-35 aircraft per day.” #51.25 Politiken; 22-dec-2008; Jacob Svendsen; ”Regeringen og S overvejer færre kampfly” http://politiken.dk/politik/article617563.ece $51.26 Source: Jerusalem Post Title: Sky-high price of US fighter jet endangers Israeli purchase Date: Feb 7, 2009 23:17 | Updated Feb 8, 2009 3:55 Author: Yaakov Katz Sourcelink: http://www.jpost.com/servlet/Satellite?cid=1233304711616&pagename=JPost%2FJPArticle%2FShowFull #51.27 Source: Jerusalem Post Title: US refusing to let Israeli systems into F-35 Date: Feb 15, 2009 23:55 | Updated Feb 16, 2009 5:22 Author: Yaakov Katz Sourcelink: http://www.jpost.com/servlet/Satellite?pagename=JPost%2FJPArticle%2FShowFull&cid=1233304788804 #51.28 Ingenioren; Brigitte Marfelt; 20-Feb-09; Forsvarskommission: F16-kampfly holder længe endnu http://ing.dk/artikel/96400-fortrolige-tal-fra-forsvarskommission-f16-kampfly-holder-laenge-endnu?highlight=jsf #51.29 Ingenioren; Torben R. Simonsen; 09-Mar-09; Expert: Billion profits jet fighters taken from the air” http://ing.dk/artikel/96852-ekspert-milliard-gevinst-paa-kampfly-er-grebet-ud-af-luften?highlight=jsf #51.30 Danish Governmental Accountability Office; 25-Mar-2009 “Beretning til Statsrevisorerne … nye kampfly” http://www.rigsrevisionen.dk/media(980,1030)/09-2008.pdf #51.31 Aviation Week; 17-Mar-2009; Amy Butler; ”Boeing Unveils New Stealthy F-15” #51.32 Dagbladet; 26-Feb-09; ”Stortinget alvorlig bekymret for kampflykrise” http://www.dagbladet.no/2009/02/26/nyheter/innenriks/utenriks/jsf/jagerfly/5045910/ #51.33 Aviation Week; 24-Feb-09; Graham Warwick; “Waiting for your F35s? Buy some F16s.”

Page 114: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 114 of 136

http://www.aviationweek.com/aw/blogs/defense/index.jsp?plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3a27ec4a53-dcc8-42d0-bd3a-01329aef79a7Post%3a519b2c93-3791-4017-b8f8-fcd272d1188c #51.34 (a) Canwest News Service; 02-aug-2008; Allison Lampert “Canadian firms stand to earn billions of dollars in U.S. program” “While Prime Minister Stephen Harper has said in news reports that Canada would purchase 60 F-35 aircraft , the government has yet to commit in writing to buying a single plane.” (b) Aviation Week; 19-may-2008; Graham Warwick “Canada Lowers Number Of Planned Fighters” “Canada has reduced the number of new fighters it plans to purchase to 65 from 80, and stresses that it has not formally selected the Lockheed Martin F-35 Joint Strike Fighter (JSF) despite having participated in its development. The reduced requirement for new combat aircraft was revealed by Prime Minister Stephen Harper when he unveiled the Conservative government’s new ‘Canada First’ defense strategy in Halifax last week. The Department of National Defense (DND) says 65 aircraft is an initial planning figure, and that “the final figure will be based on the operational requirements of the Canadian Forces.” The requirements are being drawn up by the DND’s Next Generation Fighter Capability office. Canada’s participation in the F-35 program has been based on the planned procurement of 80 aircraft, the number of upgraded Boeing CF-18s the Canadian Forces will operate until they replaced by new fighters in 2017-20. Harper said fewer aircraft are required because the new fighter will have significantly greater capability than the CF-18s. Despite the widespread and understandable assumption that Harper was referring to the F-35, Canada has not yet selected its next fighter, the DND emphasizes. Like several of the international participants in the JSF program, Ottawa plans to evaluate other candidate combat aircraft before making a decision, which is required by 2012.” #51.35 Source: Flight International 09-Aug-2008 “Japan to delay fighter RFP once again” http://www.flightglobal.com/articles/2008/08/09/310542/japan-to-delay-fighter-rfp-once-again.html #51.36 Canberra Times, Australië, 11-Nov-2008 #51.37 Australian Parliament; 10-Jul-2008: Proof Committee Hansard, Defence Subcommittee, Defence annual report 2006-07, Canberra. #51.38 Website JSFNieuws.nl (Boeing Press Bulletin); 11-Nov-2008; Singapore buys no JSF in short term, but F-15SG Eagle” #51.39 Helsinki Times; 12-Nov-2008; “Finnish Airforce eyes F-35 as future mainstay” http://www.helsinkitimes.fi/htimes/index.php?option=com_content&view=article&id=4088:finnish-air-force-eyes-f-35-as-future-mainstay-hs-yle-&catid=33:general&Itemid=201

Page 115: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 115 of 136

#51.40 Reuters (Jim Wolf); 11-Oct-2008; “Italy opts against F-35 early phase role” #51.41 Defence Weekly 13-mei-2005 “Boeing hedges against JSF delays”) http://www.janes.com/aerospace/military/news/idr/idr050513_1_n.shtml #51.42 (a) Flight International; 23-Jul-2007; Stephen Trimble; “US Navy Super Hornet deal could cut JSF numbers” “Naval aviation officials are seeking to reclaim hundreds of F/A-18E/Fs cut from the programme after JSF was launched in the late 1990s. Since then, the Super Hornet programme has been cut from about 1,000 aircraft to the current plan to buy 460 of the fighters, plus about 90 EA-18G Growler electronic-attack aircraft. The USN now wants to reclaim as many of those lost aircraft as possible, says F/A-18 programme manager Capt Don Gaddis. Naval leaders say they face a shortfall of as many as 200 fighters in the inventory up to 2030. Last month, Boeing disclosed it has made an unsolicited offer to sell a further 170 Super Hornets for about $49 million each. Gaddis says he has agreed to discuss terms for buying 152 aircraft, an amount thought of as a random starting point for obtaining pricing information. The number includes about 90 aircraft already scheduled to be purchased in fiscal years 2010 and 2011, plus about 60 new orders to be wrapped into a third multi-year procurement (MYP) deal for the F/A-18E/F, he says.” (b) FlightGlobal, 18-Jul-2008; “F-35 leader accuses Boeing of spreading lies”. http://www.flightglobal.com/articles/2008/07/18/225844/f-35-leader-accuses-boeing-of-spreading-lies.html #51.43 Sydney Moring Herald, 30-jul-2008, “Fitzgibbon coy over Joint Strike Fighter” http://news.smh.com.au/national/fitzgibbon-coy-over-joint-strike-fighter-20080730-3nb1.html #51.44 The Korea Times, 26-jun-2008, auteur Jung Sung-ki “S.Korean Airforce sceptical about stealth fighters” http://www.koreatimes.co.kr/www/news/nation/2008/06/116_26614.html #51.45 Defense Industry Daily 8-jun-2008 inzake Griekenland http://www.defenseindustrydaily.com/greece-alters-its-defense-spending-priorities-plans-02476/ #51.46 Reuters; persbericht; 12 mei 2008 inzake verlagen Canadese JSF behoefte van 80 naar 65. http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN1231405420080512 #51.47 Jersulem Post; 14-04-08 http://www.jpost.com/servlet/Satellite?cid=1207650003740&pagename=JPost%2FJPArticle%2FShowFull

Page 116: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 116 of 136

#51.48 Oral Evidence, taken before the United Kingdom Defence Committee on Tuesday 29 January 2008. Chairman: Mr. James Arbuthnot. Member Defence Committee: Mr. Bernard Jenkin Richard Younger-Ross Member Defence Committee: Mr. Adam Holloway John Smith Witness: General Sir Kevin O’Donoghue KCB CBE, Chief of Defense Materiel Q158 Chairman: “What is the target number of joint strike fighters? Answer witness: “It depends on what they cost” Q159 Chairman: “Are you happy with the program at the moment?” Answer witness: “……. We do not know the unit or support cost, which is why I answered the question you first asked the way I did. It would be foolish of me to suggest a number without knowing the price”. Q160 Chairman: “If the USA ordered fewer than it anticipated at the outset – there appears to be such a possibility – wouldn’t that affect how many we could afford to buy, because obviously the unit cost would go up ?” Answer witness: “It would be certainly be a factor that would have to be taken into account”. …… Q169 Richard Younger-Ross: “… JSF.. you said the number would be determined by cost. Can you give a percentage? Will it be half the number if the cost is so much? …” Answer witness: “We need to see the unit cost and then judgments will need to be made. Do we buy the number we first thought of for that price or fewer? Do we take money from a different programme?” Q174 Chairman: “The original figure was 150?” Answer witness: “Yes” Q175 Chairman: “That is cloud cuckoo land, is it not?” Answer witness: “We do not need to make a decision on that. Because the production line will run on, we can buy 36 to man one aircraft carrier plus the training aircraft and so on and buy others as and when we need them.” Q178 John Smith: “You must have a figure which is what we need for this country’s defence .” Answer witness: “The answer is that it depends on the cost . …. Requirement, minimum requirement, cost and other programmes are all intermeshed.” See also: House of Commons Defence Committee; 10th Report of Session 2007-2008; 11-mar-2008 Written and oral evidence with questions and answers about JSF procurement. http://www.publications.parliament.uk/pa/cm200708/cmselect/cmdfence/295/295.pdf $51.49 Swiss Air Force, press bulletin; 17-Jan-2008 #51.50 Agence France Presse (AFP); 17-Jun-2008 “UAE eyes Frances Rafale fighter”

Page 117: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 117 of 136

#51.51 Letter Dutch Ministry of Economical Affairs to Lower House; d.d. 24-mar-2009 about the Dutch JSF Business Case: “the 1st of July 2008 the JPO has a high estimate of 1555 export aircraft” (Foreign Military Sales, outside JSF partner countries). “the Netherlands is using the JPO “likely estimate of 1390 (most recently on 14-march-2008)” #51.52 Letter Dutch Ministry of Economical Affairs to Lower House; d.d. 24-mar-2009 about the Dutch JSF Business Case: “The Total number of aircraft to be produced as mentioned by the JPO in their letter of 1-July-2008 is 4500. This number is conform previous formal reactions of the JPO about this subject and therefore being used in our MFO calculation model”. #51.53 Answers 18-Mach-2008 from the Dutch government to the Parliament about the Dutch Accountability Office Report JSF monitoring 2007, confirming the number of 4.500 JSF’s still being used in the Dutch Business Case. “Question 76: Van hoeveel toestellen gaat Nederland inmiddels uit, de 3089 zoals vermeld op bladzijde 26 of de 6.000 vermeld op bladzijde 40? Is Nederland bij alle drie de typen JSF’s evenveel betrokken of zijn er ook orders die speciaal bedoeld zijn voor één van de drie typen JSF’s, bijvoorbeeld de Conventional Take-Off and Landing (CTOL)? Answer government: “Zoals uiteengezet in de brief over de deelneming aan de SDD-fase van 11 februari 2002 (Kamerstuk 26 488 nr. 8) gaat Nederland bij de berekening van de business case en de schatting van omzet van de Nederlandse industrie uit van 4.500 vliegtuigen. Dit aantal is opgebouwd uit de verkopen aan de JSF-partnerlanden inclusief de Verenigde Staten en exportlanden.” #51.54 Flight International; Craig Hoyle; 23-mrt-2009 “Greece accepts first new F-16 fighter”. #51.55 Mr. Vollebregt (Stork, The Netherlands) interview Economisch Dagblad, 14-Mar-2009; Financieel Dagblad and interview Radio KRO Goedemorgen Nederland radio broadcast the same week. #51.56 Xinhua; 12-Feb-2009 “France to deliver Rafale plane to Kuwait before year-end: Sarkozy”. “France and Kuwait are expected to conclude an agreement on the delivery of French Rafale fighter planes before the end of this year, French President Nicholas Sarkozy said here Wednesday. …..and 14 to 28 planes will be delivered, he said, adding that ‘for Kuwait that is not the end of the story.’” #51.57 Reuters; 11-Feb-2009; “Visit Sarkozy Kuwait, Bahrain, Oman” “In Oman, Sarkozy aimed to sell French-made aircraft to replace the country’s aging 20 Anglo-French Jaguars. This was to be a challenge since most Middle East countries buy from the English-speaking world. “These are by tradition Anglo-Saxon countries — fine, but France has its own cards to play,” Sarkozy told journalists before meeting the Sultan of Oman, Qaboos bin Said. “I am not going to leave here empty-handed. We are sowing seeds and then we will fight to defend our companies and bring back contracts,” he said. Sarkozy tried to do the same in both Bahrain and Kuwait.”

Page 118: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 118 of 136

See also IDRW; 19-Mar-2009 “Oman, Kuwait and Bahrain are also negotiating for the Rafale. Muscat (capital of Oman, editor) would choose from either the Rafale or the Eurofighter.” #51.58 Press Bulletin Saab; 19-Mar-2009; “Gripen offers in Greece” “The Saab Greece in a bid to sell 40 new fighter Gripen. The offer includes full funding, industrial cooperation in the Greek custom requirements, as well as possible interim solution Gripen fighters to meet immediate operational needs.” #51.59 Defense Industry Daily; 22-Mar-2009; India’s MMRCA Fighter Competition “In February 2006, India’s Chief Air Marshal recently specificaly noted that the JSF was not in their plans for this buy, a likelihood that DID’s analysis had noted earlier due to probable lack of availability before 2015. The August 2007 MRCA RFP confirmed this.” ……….. “The F-35’s killer weakness was timing. Its advanced systems, established industrial partnership structure and program procurement policies could also make it nearly impossible to meet India’s industrial offset rules.” #51.60 Aviation Week; 27-Mar-2009; “More Belgian F16s for Jordan” #51.61 Aviation Week; Graham Warwick; 16-Mar-2009; “Taiwan gets its P3s, want more F-16s, still eyes F-35s” “………contract finally signed for 12 refurbished and upgraded P-3C Orions, Taiwan is renewing its push for the US to approve the sale of 66 F-16C/Ds. And local reports say Taipei's first Quadrennial Defense Review (QDR), released on Mar. 16, calls for the procurement of "next-generation fighter jets with stealth and short takeoff and landing capabilities" - renewing the idea of Taiwan buying F-35s. Good luck with that. It has taken eight years to get some ex-Navy P-3s, which were first offered by the US in 2001 as part of an arms package that was repeatedly delayed by political infighting in Taipei and Chinese pressure on Washington. Taiwan first sought F-16C/Ds in 2006, and so far the US has refused to consider the sale. Any possibility of Taipei being allowed F-35s lies far in the future……” #51.62 Ceske Noviny; 08-Mar-2009; “Czech Defence Minister Parkanova : Buy Gripens after lease period” http://www.ceskenoviny.cz/news/zpravy/czech-military-should-purchase-gripens-after-2014-minister/364467 #51.63 Gerard Keijsper; 2007; “Lockheed F-35 Joint Strike Fighter Design and Development of the International Aircraft” (270 pages; ISBN9781844156313; Pen&Sword Books Ltd. UK). Page 260-261, Export countries, Australia. #51.64 Ibid., page 262, Export countries, Belgium #51.65 Ibid., page 277-278, Export countries, Singapore #51.66 Ibid., page 267, Export countries, Japan

Page 119: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 119 of 136

#51.67 Ibid., page 278, Export countries, Spain #51.68 Airforces Monthly; (all the world’s military aviation news, by region); Key Publishing Ltd., UK August 2007 #51.69 Ibid., October 2007 #51.70 Ibid., November 2007 #51.71 Ibid., May 2008 #51.72 Ibid., July 2008 #51.73 Ibid., August 2008 #51.74 Ibid., September 2008 #51.75 Ibid., October 2008 #51.76 Ibid., November 2008 #51.77 Ibid., December 2008 #51.78 Ibid., February 2009 #51.79 Ibid., March 2009 $51.80 Ibid., May 2009 #51.81 Inquiry into Australian Defence Force Regional Air Superiority,Defence Sub-Committee Joint Standing Committee on Foreign Affairs, Defence and Trade,August 2007, Accessed September 12, 2007 #51.82 Gerard Keijsper; 2007; “Lockheed F-35 Joint Strike Fighter Design and Development of the International Aircraft” (270 pages; ISBN9781844156313; Pen&Sword Books Ltd. UK). Page 270, Export countries, Netherlands, reference to Dutch “Basis Document 2001”.

Page 120: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 120 of 136

#51.83 (a) Flight Daily News; 07-jun-2009; Craig Hoyle; “Paris Air Show: Gripping Gripen” (b) Ainonline; 15-jun-2009; “Raven radar equipped Gripen to fly by year-end” #51.84 US Embassy Poland; 14-aug-2008’ “U.S., Poland Conclude Missile Defense Negotiations” #51.85 Militarium - Uzbrojenie Wojska Polskiego 2008 #51.86 Voice of America News; 14-aug-2008 “Poland, US Reach Preliminary Deal on Missile Shield” #51.87 Congressional Research Service USA; 11-feb-2009; Shirley A. Kan; “Taiwan Major U.S. Arms sales since 1990” Link: http://www.fas.org/sgp/crs/weapons/RL30957.pdf Analysis of the refusal of president Bush to freeze pending sales to Taiwan and refusal to accept Taiwan request for F-16C/D fighters, blocking the Initial funding of 66 F16C/Ds for clear political reasons (see page 22-24. and more). #51.88 Associated Press; 19-feb-2009; Singapore Airshow #51,89 Bloomberg; 20-feb-2008; James Gunsalus and Kyunghee Park; Singapore Airshow #51.90 Source: U.S Air Force; 12-aug-2009; “Convention Showcases Unmanned Capabilities” (published Defense Aerospace 13-aug-2009) #51.91 The Growing Air Power Fighter Gap: Implications for U.S. National Security by Mackenzie Eaglen and Lajos Szaszdi, Ph.D.; Backgrounder #2295; July 7, 2009 #51.92 Hearing on Air Force and Navy aviation programs, transcript, Subcommittee on Airland, Committee on Armed Services, U.S. Senate, 110th Cong., 2nd Sess., April 9, 2008, p. 16, at http://www.senate.gov/~armed_services/ Transcripts/2008/04%20April/Airland/08-36%20-%204-9-08.pdf #51.93 Hearing on Air Force and Navy aviation programs, transcript, Senate Armed Service Committee; Rear Admiral Allen Myers; 9-april-2008 #51.94 Congressional Research Service (CRS) report JSF; April 2009 #51.95 Air Force Magazine, April 2008, Adam J. Herbert, "The Fighter Numbers Flap” http://www.airforce-magazine.com/MagazineArchive/Pages/2008/April%202008/0408IssBf.aspx #51.96

Page 121: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 121 of 136

CSBA; 2007; Steven Kosiak and Barry Watts; “Fighter Modernization Plan, near term choices” #51.97 (a) Defense-Aerospace.com; 08-sep-2009; “Brazil to Buy 36 Rafales As France Extends Security Partnership” (b) Source: Brazilian Ministry of Defence; 07-sep-2009 “Presidents of Brazil, Luiz Inácio Lula da Silva, and France, Nicolas Sarkozy, announced on Monday, September 7, 2009, a new step in cooperation between the two countries in the aeronautics field.” “Brazil has opened negotiations with the French for the purchase of 36 Rafale fighter jets as part of its project FX-2.” #51.98 Jerusalem Post; 08-sep-2009; Yaakov Katz; “Israel-US JSF deal likely to be delayed” “Israel Air Force had initially hoped to sign a letter of agreement in the coming months, but officials said that until the differences were resolved and a price was determined the contract would be postponed. If that happens, the arrival of the aircraft - initially slated for 2014 - will also be pushed” “on the price, the official said that if the plane crossed the $100 million mark Israel would have to seriously reconsider how many aircraft it will purchase”. #51.99 Instituto Affari Internazionali; IAI Quaderni English series 16; Michele Nones, Giovanni Gasparini, Alessandro; “Europe and the F-35 Joint Strike Fighter (JSF) Program” (96 pages; English translation July 2009; original Italian version October 2008) #51.100 US House of Representatives; Duncan Hunter; 17-jun-2004 http://armedservices.house.gov/comdocs/pressreleases/2004/04-06-17hunterpm.pdf #51.101 Reuter (Paris); 17-jun-2009; Andrea Shalal-Esa “Pentagon sees 6,000 possible F-35 sales” “Brigadier Gen. David Heinz, program executive officer for the F-35, said development and testing of the new fighter jet was going well, and the United States and its eight foreign partners were expected to order more than 3,100 fighters Initial foreign military sales to other countries such as Spain, Israel, Greece, Singapore, South Korea, Japan and Finland could add at least 1,000 more orders. In time, as world fleets of F-15, F-16, F-18 and other fighter jets need replacements, sales could climb as high as 6,000, Heinz told reporters at the Paris Air Show” #51.102 DoDBuzz; 17-jun-2009; Colin Clark; “JSF Kills Best SAMs Too: Heinz” “On the industrial base side of the program, Heinz told reporters here that the program could reasonably generate an astonishing 6,000 sales. He based his estimate on the 4,425 F-16s sold around the world in various development blocks, combined with 600 F-18 E/Fs and Typhoons. “As these airplanes aqe out, I believe my airplane will be competitive,” he said. The United States and the eight foreign partners are expected to order about 3,100 planes. Add 1,000 sales to prospective buyers such as Israel, Singapore, Spain, Japan, Finland and South Korea. Then top up the rest of the world and you get to Heinz’ figure of 6,000.”

Page 122: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 122 of 136

#51.103 Flight International; 01-Jul-2009; Siva Govindasamy; "Pakistan begins domestic final assembly of JF-17" http://www.flightglobal.com/articles/2009/07/01/329056/pakistan-begins-domestic-final-assembly-of-jf-17.html #51.104 DoD Buzz; 08-sep-2009: Greg Grant “Saudi eye buying 72 F15s” “Saudi Arabia is close to placing an order for as many as 72 Boeing F-15 fighter jets, industry and defense sources tell us. Growing security concerns over Gulf neighbor and perennial troublemaker Iran are pushing the Saudis to upgrade their air fleet with a particular emphasis on precision strike aircraft. The Pentagon is expected to approve the sale as it seeks to counter Iran’s recent break-out as a regional power and quell nervousness among Gulf Arab states troubled by Iran’s growing stockpile of increasingly accurate and long-range ballistic missiles.” Also: DoD Buzz; 11-sep-2009; Greg Grant “Saudis Likely to get F-15SG” #51.105 UPI Jerusalem; 11-sep-2009; “Israël’s bid for F-35 stalls” “On pricing, the Pentagon had originally proposed $200 million per aircraft for the first batch, more than twice that the Israelis had anticipated. The Defense Ministry has been looking at a figure of $70 million to $80 million per aircraft. The Jerusalem Post quoted an unidentified senior Israeli officer as saying that if the cost per aircraft reached $100 million the Defense Ministry would have to reconsider the number of aircraft it would be able to buy.” #51.106 Airforces Monthly; (all the world’s military aviation news, by region); Key Publishing Ltd., UK July 2009 #51.107 Ibid., September 2009 #51.108 Flight International; 11-17-Nov-2008 “Directory World Air Forces, page 53-76” #51.109 Defence Aviation; 27-Oct-2008; “Sukhoi/HAL FGFA a Indian Stealth Fighter” See http://www.defenceaviation.com/2008/10/sukhoihal-fgfa-a-indian-stealth-fighter.html #51.110 AINonline; 20-aug-2009; Chris Pocock; “More Eurofighters Ordered, but Cost Ceiling Now Reached” #51.111 RAND Report, prepared for the UKs Ministry of Defence; 2003; “Assembling and Supporting the Joint Strike Fighter in the UK, Issues and Costs”

Page 123: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 123 of 136

#51.111 (continued….)

#51.112 Aviation Week; 23-sep-2009; Christina Mackenzie; “Royal Navy Chief says aircraft carriers could be scuppered” “Admiral Sir Mark Stanhope, chief of staff of the Royal Navy, says that although contracts have been signed to build the aircraft carriers HMS Queen Elizabeth and HMS Prince of Wales, next year's defence review could scupper the plans. He says the navy is bracing itself for budget cuts. "Alongside the other two services we will have to make some difficult decisions," he said, speaking aboard HMS Illustrious in the presence of the weapons' procurement minister, Lady Taylor. He added that a balance needed to be struck between the number of ships and submarines Britain could afford and the range of capabilities they offered. "Once capabilities are lost, they can't be plucked from a hat," he said” #51.113 The Times reported 20-sep-2009: “Rolls-Royce is fighting a last-ditch battle to stop Barack Obama axing a military-engine contract that could see it share an estimated $50 billion (£30.7 billion) in sales over the next two decades. The aero-engine maker was last week lobbying in Washington to prevent funding being withdrawn for its engine for the F-35 Joint Strike Fighter (JSF). Failure would be a serious setback for Rolls-Royce’s defence business, with job losses on both sides of the Atlantic.” [#51.113]. #51.114 Aviation Week; 20-sep-2009; Bradley Perret; “Seoul Drops KFX Technology Target To Generation 4.5” #51.115 Flight International; 12-May-2009; Tolga Ozbek; “Turkey retires first squadron of F-4 Phantoms” #51.116 Teal Group, Virginia USA; 24-feb-1999; World fighter/attack aircraft production forecast 1999-2008.

Page 124: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 124 of 136

#51.117 Flight International; 23-Jul-2007; Stephen Trimble "US Navy Super Hornet deal could cut JSF numbers" #51.118 DefenseNews.com; 5-Mar-2008; "U.S. Navy Mulls New F/A-18E/F Buy". #51.119 CRS; Report for Congress; 22-Jul-2009; Ronald O’Rourke; “Navy F/A-18E/F and EA-18G Aircraft Procurement and Strike Fighter Shortfall: Background and Issues for Congress” #51.120 The Hill; 02-feb-2009 “Boeing confident Navy will buy more Super Hornet fighting jets”. #51.121 Reuters; 26-aug-2009; Andrea Shalal-Esa; “Boeing pitching hard for more F/A-18 sales” #51.122 CRS; Report for Congress; 22-Jul-2009; Ronald O’Rourke; “Navy F/A-18E/F and EA-18G Aircraft Procurement and Strike Fighter Shortfall: Background and Issues for Congress” #51.123 US-GAO (Government Accountability Office); March 2007; “JSF: Progress Made and Challenges Remain” (US GAO-07-306), page 20. #51.124 Joint Estimate Team, presentation, US DoD, September 2008 #51.125 US-GAO (Government Accountability Office); March 2009; “Defense Acquisitions: assessments of Selected Weapon Programs” (US GAO-09-326P, JSF, page 93-96). #51.126 Center for Strategic and Budgetary Assessments (CSBA); September 2009; Dr. Thomas P. Ehrhard “An Air Force Strategy for the Long Haul”. Thomas P. Ehrhard served as a senior fellow of the CSBA from April 2006 to July 2009. In the past Colonel Ehrhard worked as a division chief ot the US Air Force QDR 2001 staff. At this moment Dr. Ehrhard serves as a special assistant of the Chief of Staff of the US Air Force. #51.127 The Heritage Foundation, Backgrounder No.2295; 7-Jul-2009; Mackenzie M. Eaglen and Lajos F. Szaszdi; “The Growing Air Power Fighter Gap: Implications for U.S. National Security”. #51.128 Aviation Week; 23-sep-2009; Amy Butler; “Italy Could Scale Back F-35 Facility”. “The Italian government and Alenia Aeronautica are in negotiations on how to finance the

domestic F-35 final assembly and checkout (FACO) facility in light of fiscal belt-tightening

brought on by the global recession.

Shifts in the approach could include opting against a more sophisticated moving

assembly line, which would replicate the main final assembly plant at Lockheed Martin’s

Fort Worth, Texas, facility. <…..> Underlying the discussion is the question of value for

Page 125: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 125 of 136

the Italian industry, given economic pressures that could prompt the purchase of fewer

aircraft or trim back the configuration of the FACO facility.”

#51.129 Defense News; 15-dec-2008; Tom Kington “Italy mulls Afghan Commitments, Shrinking Budgets”. Link http://www.defensenews.com/story.php?i=3863634 #51.130 The Australian Financial Review; 22-Sep-2009; John Kerin; “Attempt to fix price of fighter jets fails”

Page 126: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 126 of 136

5.1.A.1 Appendix A.1 - PSFD-MOU quantity estimate 2006 Estimated JSF Air Vehicle procurement quantities of the JSF Program Participants as identified in November 2006 (Memory of Understanding Production Sustainment Follow-up Development).

Source: JSF Program Office PSFD-MOU November 2 006, annex A (distribution unlimited)

Page 127: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 127 of 136

5.1.A.2 Appendix A.2 - PSFD-MOU quantity estimate april 2007 Estimated JSF Air Vehicle procurement quantities of the JSF Program Participants as identified in an April 2007 revision, only 2 months after last Participant signed the original estimate (See 5.1.A.1). Moving hundreds of F-35s of the USA and UK to the 2020s and 2030s, with important budget impact for all early buyers. especially Australia and The Netherlands.

Source: JSF Program Office PSFD-MOU April 2007 revision, annex A (distribution unlimited)

Page 128: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 128 of 136

5.1.A.3 Appendix A.3 PSFD-MOU US estimate by version april 2007 Estimated JSF Air Vehicle procurement quantities of the US Forces as identified in an April 2007 revision with cumulative quantities. The quantities of USMC and USN are not fixed yet. Since 2007 several changes are proposed. Also more funding will be required to keep these estimated quantities. US AIRFORCE : 1763 JSF F-35A

US NAVY : 680 JSF F-35B and F-35C

TOTAL USA : 2443 JSF all versions

SOURCE : MoU PSFD Appendix A; (revised) April 2007

USAF JSF F-35A CTOL F35B F35C USN USN USA TOTAL ALL

Funding Year Cum Year Year Year Cum Year Cum Production

Fiscal Year Qnt Qnt Qnt Qnt Qnt Qnt Qnt Qnt cycle/block

FY07 2 2 0 0 0 0 2 2 LRIP 1

FY08 6 8 6 0 6 6 12 14 LRIP 2

FY09 8 16 8 0 8 14 16 30 LRIP 3

FY10 12 28 14 4 18 32 30 60 LRIP 4

FY11 24 52 13 6 19 51 43 103 LRIP 5

FY12 42 94 25 15 40 91 82 185 LRIP 6

FY13 48 142 25 17 42 133 90 275 LRIP 7

FY14 66 208 25 25 50 183 116 391 FRP

FY15 80 288 25 25 50 233 130 521

FY16 80 368 25 25 50 283 130 651

FY17 80 448 25 25 50 333 130 781

FY18 80 528 25 25 50 383 130 911

FY19 80 608 25 25 50 433 130 1041

FY20 80 688 25 25 50 483 130 1171

FY21 80 768 25 25 50 533 130 1301

FY22 80 848 25 25 50 583 130 1431

FY23 80 928 25 25 50 633 130 1561

FY24 80 1008 22 25 47 680 127 1688 (363 F35B and

FY25 80 1088 0 0 0 680 80 1768 317 F35C)

FY26 80 1168 0 680 80 1848

FY27 80 1248 0 680 80 1928

FY28 70 1318 0 680 70 1998

FY29 70 1388 0 680 70 2068

FY30 70 1458 0 680 70 2138

FY31 70 1528 0 680 70 2208

FY32 70 1598 0 680 70 2278

FY33 70 1668 0 680 70 2348

FY34 70 1738 0 680 70 2418

FY35 25 1763 0 680 25 2443 Source: prepared by JOBO, based on JPO MOU-PSFD april 2 007 Annex A

Page 129: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 129 of 136

5.1.A.4 Appendix A.4 – US Air Force “funded only” estimate april 2008

Recalculation of Eric Palmer; 2 april 2008 in “Where is the 1763rd F-35 for USAF?” Url: http://worldwidewarpigs.blogspot.com/2008/04/where-is-1763rd-f-35-for-usaf_02.html

Source: Worldwidewarpigs Eric Palmer 02-apr-08

Page 130: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 130 of 136

5.1.A.5 Appendix A.5 - PSFD-MOU revised estimate november 2008 JSF Executive Steering Board decision memorandum #5 of 19 November 2008; changes to Annex A. Estimated JSF air vehicle procurement quantities of the PSFD-MOU. “The overall estimated JSF Air Vehicles (AV) procurement quantities in specific years for the Netherlands and the U.S. are modified as shown in the attachment (Annex A). ….. All other Participant estimates are unchanged.” The Royal Netherlands Air Force moved a number of F-35As to later years; the US figure was changed after confirmation of the FY09 defence budget.

Source: JSF Program Office PSFD-MOU November 2008 revi sion, annex A (distribution unlimited)

Page 131: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 131 of 136

5.1.A.6 Appendix A.6 – JSF Program Office quantities April-2009

The US Pentagon Joint Estimate Team audit report presentation JSF Program of September 2008 used a new schedule, including a new “Low Rate Initial Production Batch 8 ” and the start, again later, of the first Multi Year Buy in FY2015. The presentation showed several calculations of a possible “consortium buy”.

In a JSF Program Office April 2009 presentation of Keith Knotts the same table was used in a public release.

Source: JSF Program Office (distribution unlimited)

Page 132: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 132 of 136

5.1.A.7 Appendix A.7 – FY2009 USMC Aviation Plan October 2008

Source: US Marine Corps Aviation Plan FY2009, october 2008 (distribution unlimited)

Source: US Marine Corps Aviation Plan FY2009, october 2 008 (distribution unlimited)

Page 133: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 133 of 136

5.1.B.1 Appendix B.1 World Fighter Fleet 2008 and countries of origin A recompilation of the World Fighter Fleet shows the origin of jet fighter in use around the world. The recompilation was based on data from Flight International; 11-17-Nov-2008 “Directory World Air Forces, page 53-76”; Air Force Monthly January 1999 – August 2009; Dutch website www.scramble.nl “Airforces - Order of Battle”; website F16.net. Chinese jet fighters Harbin H-5 (Il-28) 480 in use by 3 countries Shenyang J-5/F-5(MiG-17PF) 128 in use by 2 countries Shenyang J-6 (MiG-19) 325 in use by 10 countries Qiang Q-5 (redesign MiG-19) 683 in use by 6 countries Chengdu J-7/F-7 (MiG-21) 934 in use; 21 on order by 13 countries Shenyang J-8 220 in use by 2 countries Chengdu J-10 140 in use; 36 on order by 1 country Shenyang J-11 (SU-27) 98 in use; 22 on order by 1 country Chinese/Pakistanian jet fighters PAC JF-17 Thunder 8 in use; 142 on order by 1 country Total Chinese 3016 in use; 221 on order European jet fighters Panavia Tornado 590 in use by 4 countries Eurofighter Typhoon 138 in use; 565 on order by 6 countries Total European 728 in use; 565 on order French jet fighters Dassault Mirage 3 117 in use by 3 operators Dassault Mirage 5 336 in use by 8 operators Dassault Super Etendard 56 in use by 2 operators Dassault Mirage F1 270 in use by 8 countries Dassault Mirage 2000 530 in use by 9 countries Dassault Rafale: 55 in use; 62 on fixed order by 1 country (more in option) Total French 1364 in use; 62 on order Israelian jet fighters IAI Kfir: 29 in use by 3 countries IAI Nesher (Mirage 5 variant) 13 in use by 1 country Total Israelian 42 in use Italian/Brazilian jet fighters Alenia-Embraer AM-X 191 in use by 2 operators Japanese jet fighters Mitsubishi F2 75 in use and 21 on order by 1 country

Page 134: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 134 of 136

Russian jet fighters Mikoyan-Gurevich Mikoyan-Gurevich MiG-15 17 in use by 5 operators Mikoyan-Gurevich MiG-17 57 in use by 4 operators Mikoyan-Gurevich MiG-21 1183 in use by 24 countries Mikoyan-Gurevich MiG-23 623 in use by 14 countries Mikoyan-Gurevich MiG-25 139 in use by 7 countries Mikoyan-Gurevich MiG-27 133 in use by 2 countries Mikoyan-Gurevich MiG-29 1195 in use and 55 a/c on order by 25 countries Mikoyan-Gurevich MiG-31 349 in use and 5 on order by 2 countries Subtotal Mikoyan-Gurevich 3696 in use; 60 on order Sukhoi Sukhoi Su-7 33 in use by 2 countries Sukhoi Su-17 150 in use by 3 countries Sukhoi Su-20 4 in use by 1 country Sukhoi Su-22 345 in use by 8 countries Sukhoi Su-24 817 in use by 9 countries Sukhoi Su-25 525 in use by19 countries Sukhoi Su-27-30-33 family 972 in use and 394 on order by 15 countries Sukhoi Su-34: 10 in use and 48 on order by 1 country Subtotal Sukhoi 2856 in use; 442 on order Total Russian 6552 in use; 502 on order Swedish jet fighters JAS39C-D Gripen 186 in use and 64 on order by 5 countries Taiwanese jet fighters AIDC F-CK-1 Ching-kuo 126 in use United Kingdom jet fighters BAe Harrier 93 in use (9 stored) by 3 countries Sepecat (BAe) Jaguar 169 in use; 12 on order (India) by 2 countries (including Indian licensed HAL Jaguar) Total British 262 in use US jet fighters Boeing McDonnel-Douglas A4 Skyhawk 182 in use by 4 operators Rockwell A-10 366 in use by 1 operator (USAF) McDonnel-Douglas AV-8 Harrier 183 in use by 3 operators McDonnel-Douglas F-4E Phantom II 646 in use by 7 operators Boeing F-15 Eagle 1149 in use; 45 on order; 5 operators Boeing F/A18 Hornet 1048 in use by 9 operators Boeing E/F/A18E/F/G Super Hornet 337 in use; 226 on order by 2 operators Subtotal Boeing 3911 in use, 271 on order LTV A7 Corsair II 62 in use by 1 operator Northrop-Grumman Northrop F-5 1214 in use by 25 countries Grumman F-14 Tomcat 25 in use by 1 country (Iran)

Page 135: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 135 of 136

Grumman EA-6 Prowler 83 in use by 1 operator (USN) Subtotal Northrop-Grumman 1322 in use Lockheed Martin General Dynamics F-111 21 in use by 1 operator (RAAF) Lockheed Martin F-16 3062 in use; 113 on order; 25 operators Lockheed Martin F-22 113 in use; 74 on order; 1 operator (USAF) Lockheed Martin F-35 0 in use; 28 on order; more options Subtotal Lockheed Martin 3196 in use; 215 on order Total US products 8491 in use; 486 on order Yugoslavian (FYR) jet fighters Soko G-2 1 in use by 1 country Soko G-4 34 in use by 3 countries Soko J-1 10 in use by 1 country Soko J-22 33 in use by 2 countries Total Yugoslavian (FYR) 78 in use WORLD Total fighter in use = 21.111; on order =1845

Page 136: Market analysis JSF - Revista Defensa Infodefensa.com · the jet fighter market did not grow, defence budgets are under pressure, the JSF was delayed, but the market expectations

Report for Dutch Parliament Sep-2009 Market Analsysis JSF

Jobo © JSF51 V3.00 Page 136 of 136

Author contact information and background Johan Boeder Rijnbandijk 149 4041 AV KESTEREN THE NETHERLANDS E-mail [email protected]

His motivation, as a free and independent citizen: - Concerned about the democratic processes - Concerned about an adequate use of tax money - Concerned about the national security and defence Johan Boeder started publishing about aviation in 1977 as a freelance author at the Dutch newspaper Reformatorisch Dagblad. Later he was involved in publications and reports about the fatal crash of a Belgian C130 Hercules at Eindhoven airport (1996). His publications (june 1997) were helpfull to support the Dutch Hercules Ramp Society in triggering the Dutch parliament to give renewed attention to what caused this crash. Publications about this subject in which he was involved were published in Telegraaf (13 februari 1998) and Reformatorisch Dagblad (21 juni 1997). Since November 2007 he published several times about the Joint Strike Fighter project, the first titled “JSF Hit by serious design problems ” (Defense Aerospace, nov.2007 and Defense Industry Daily USA, dec.2007) and he is the author of several Submissions about the JSF to the Dutch Parliament. In February 2008 he published “When Sukhoi meets JSF in 2020” in Norwegian language in the Norwegian military magazine Officesbladet. In May 2008 he was involved in a briefing about the JSF status to the members of the Dutch Parliament “Train to Venice. JSF, dream of drama? ”. In April 2009 he was questioned in the parliamentary JSF hearing of the Dutch Parliament’s Defence Committee amongst several national and international JSF experts. In April 2009 he published an early version of this Market Analysis for members of the Dutch parliament. Also, a separate report, “Exploitation cost JSF, more than doubled since 2002”, April 2009, 44 pages, for the Dutch Parliament, Standing Committee of Defence is available. His publications and reports are characterized by high quality research and analytical aspects. His professional career is in technical software development with a specialisation in vehicle/machine construction, development and maintenance. Johan Boeder is CEO/owner of the Dutch software company BEVER Software.