By Avascent Analytics team
A quick look at the biggest stories of the week
Japan • Mexico • Germany • Finland • France/Germany • Pakistan
On April 20, news broke that Lockheed Martin proposed a hybrid of the F-22 and F-35 for Japan’s F-3 future stealth fighter program. Japan has longed to procure F-22’s from the US, but Congress opposed the sale. The Japanese government also wants the F-22 to carry eight air-to-air missiles internally and launch drones that can extend the aircraft’s sensor reach. Japan has been researching the idea of unmanned wingman drones for some time and hopes to have the technology to build such wingmen in place by the time the F-3 is developed. These requirements also suggest an aircraft larger than the F-35, and closer in size to the F-22 or Russian T-50. Arguably the biggest issue that this development effort will face is Japan’s defense R&D budget, which has hovered around 2-3% of the defense budget for the past 15 years. This translates to an R&D budget that struggles to go beyond $1.5 billion per year.
Future negotiations on cost sharing will not just affect F-3 development, but Japan’s ability to fund other important defense R&D priorities, most notably ballistic missile defense. Assuming that R&D will account for around half of the estimated $40 billion program (US experience has shown R&D tends to account for between 33-50% of total program cost for stealth aircraft), Japan may find itself struggling to balance funding for other projects with F-3 development, depending on how much of the R&D bill a foreign partner is willing to foot. F-3 development is likely to be more expensive than the government estimates, not just because this has been the trend for other fighter development efforts around the world, but because Japan will try to develop and incorporate what it believes to be 6th generation fighter technology into the aircraft. Stay tuned for an upcoming data story by Avascent Analytics on the topic in the near term.
On April 19, the US State Department approved a possible FMS sale of MH-60R helicopters to Mexico. The deal is valued at $1.2 billion and includes eight Seahawk multi-mission helicopters, 1,000 sonobuoys, ten Hellfire missiles, nine training missiles, 38 Advanced Precision Kill Weapons Systems, and 30 lightweight hybrid torpedoes, among other equipment. Mexico has asked that the Seahawks come equipped with advanced systems that would help with nighttime operations with the intent to improve the country’s ability to combat criminal organizations operating within its territorial waters.
On April 22, German newspaper Handelsblatt reported on the Ministry of Defense’s intent to approve at least 18 contracts for 2018, with each contract worth more than $30 million. While the fate of the contracts on the list ultimately depends on the 2018 defense budget, potential acquisitions include Heron TP UAVs worth up to $1.1 billion, six C-130Js, seven search and rescue helicopters to replace its UH-1D fleet, ongoing maintenance for its NH90 helicopters, and upgrades to the country’s frigates, Eurofighter, and Puma infantry fighting vehicles. In addition to these acquisitions, Germany is also collaborating with France to develop European solutions to replace older equipment. Avascent Analytics previously reported on German-Franco efforts to sign a letter of intent to co-develop a maritime surveillance aircraft that would replace Germany’s P-3Cs and Frances Atlantique 2s. Germany is also collaborating with France on a future combat aircraft and UAV project.
On April 23, Finnish media reported that Finland will issue a request for quotation for its future fighter program to five contenders. Letters inviting bids will be sent to BAE Systems (Eurofighter Typhoon), Dassault (Rafale), Saab (Gripen-E), Boeing (F/A-18 Super Hornet), and Lockheed Martin (F-35). All five companies received a request for information in April 2017. The replacement of Finland’s 64 F/A-18 Hornet aircraft is planned to cost between $8.5 billion and $12 billion with the aircraft entering service by the mid-2020s.
According to local news, France and Germany are expected to sign a memorandum of understanding (MoU) covering the development of a future fighter and future tank during this week’s ILA Air Show in Berlin. The agreement would see Dassault Aviation take the role of the primary contractor on the SCAF (Système de Combat Aérien du Futur) manned combat aircraft with Airbus Defense & Space serving as the primary subcontractor and Thales gaining an elevated subcontracting position. The likely sixth-generation fighter would be projected to reach production by 2040. This news comes amid rising industry pressure by both Airbus Defense & Space and Dassault on the German government to not procure the F-35 to replace the Tornado, as the Airbus Defense & Space CEO stated that if Germany acquires the F-35, then “cooperation on all combat aircraft issues with France will die.” Meanwhile, the Franco-German MoU would also cover the development of the Main Combat Ground System (MGCS), where Germany would take the lead on the development of the main battle tank.
Pakistan’s cabinet has approved its 2019 federal budget, including defense outlays that exceed $10.1 billion. The budget will be formally approved in June when it’s submitted to parliament, which has historically rubber-stamped defense budgets generated by the military. The new defense budget represents a 14 percent jump in nominal terms from last year’s topline, which itself was a 15 percent increase over the 2017 figure. The spending boost reflects renewed hostilities with India along their contested border. A 2003 ceasefire agreement has collapsed and has been replaced with almost daily gunfire and shelling. Pakistan will spend 3 percent of GDP on defense in 2019, up from 2.6 percent during the current fiscal year. By contrast, Indian defense spending this year accounts for 1.4 percent of GDP.
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