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By Josh Pavluk, August Cole
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A quick look at the biggest stories of the week
Australia • Brazil • Japan • Raytheon • Space
On June 19, Spanish shipbuilder Navantia started the construction of the Royal Australian Navy’s auxiliary oiler and replenishment (AOR) ships during a steel-cutting ceremony at Navantia’s Fene shipyard in Ferrol, Spain. The two AORs, scheduled to be delivered in 2019 and 2020, will replace the Navy’s current supply ships HMAS Success and HMAS Sirius. Navantia was awarded the $646 million contract in spring 2016, having submitted a bid based on the fleet replenishment ship Cantabria. While the majority of the shipbuilding will be conducted in Spain, local Australian manufacturers will supply systems for the AORS, including the Integrated Platform Management System, combat management systems, and communications systems.
Airbus delivered a new C-295 search-and-rescue (SAR) aircraft to the Brazilian Air Force (FAB) on June 16. The aircraft, designated SC-105 Amazona in Brazil, is the first of three that Brazil acquired in a deal inked in 2015 worth an estimated $262 million. The remaining aircraft are expected to be delivered later this year. FAB has been eyeing SAR planes since early 2013, but was hamstrung by a lack of available funds until recently. The new aircraft include radar that will enable night operations and allow the Air Force to monitor more than 640 targets within a 200 nautical mile radius (370 km).
On June 22, the Japanese Ministry of Defense (MoD) decided that it would seek funding in FY 2018 for the Aegis Ashore ballistic missile defense (BMD) system. This comes after the MoD decided to expedite an Aegis Ashore implementation study in April. The FY 2018 funding may be for further studies, with a procurement contract to follow afterwards. The MoD had been evaluating both Aegis Ashore and THAAD to bolster Japan’s ballistic missile defenses in the face of an increasingly advanced North Korean missile force. Japanese officials concluded that the Aegis Ashore system would cost roughly $750 million per system, and that two systems could cover all of Japan. THAAD would cost about $1 billion per system, and six would be needed to cover Japan. In addition to the lower cost, the Aegis Ashore system will likely have the ability to launch SM-3 Block IIA missiles, which Japan is jointly developing with the United States.
On June 18, the president of Raytheon’s Missile Systems segment announced that the company would restart its Standard Missile 2 production line. The decision was motivated by an order from four US allies – the Netherlands, Japan, South Korea, and Australia – for approximately 280 missiles. The order, which still needs to be approved by Congress, is valued at $650 million. Raytheon expects that additional orders will follow for the Block IIIA and Block IIIB variants of the missile. Avascent Analytics estimates that the market for air and missile defense interceptors, the primary function of the SM-2, is worth $1 billion across all four countries, and that market is expected to grow at 5.5% through 2021.
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