By Avascent Analytics team
A quick look at the biggest stories of the week
Argentina • Philippines • Poland • United Kingdom • South Korea
On May 10, Argentina formally approved a $14.2 million payment for five, second-hand Dassault Super Étendard fighter aircraft for the Argentine Navy. The deal was formalized last November with France. The aircraft will reinforce the country’s dwindling inventory of fighter aircraft. The Navy’s fighter posture consists of two existing Super Étendards and nine in storage for spare parts. The Étendards have been the mainstay of the Navy’s fighter fleet since the Falklands War in the early 1980s. The Air Force plans on retiring its only fighter aircraft, 20 A-4 Skyhawks, in 2018 due to budget cuts.
On May 11, the Philippine Navy revealed the basic requirements for its corvette acquisition program under the Horizon 2 modernization plan, which runs from 2018 to 2022. The Navy is looking for a ship between 1500 and 2700 tons, armed with anti-ship missiles, anti-aircraft missiles, torpedo launchers, and an electronic warfare suite. The vessel must also be able to accommodate AW159 or SH-60 maritime helicopters. Although pricing has not been determined yet, each corvette may cost over $270 million, significantly more than the unit cost of the two frigates that Hyundai Heavy Industries is currently building for the Navy. The corvette acquisition, along with the frigates, would represent a major increase in combat capability, as the Navy currently does not field any missile-armed ships, let alone modern major surface combatants. Under the Armed Forces of the Philippines Modernization Plan, four corvettes will be acquired in Horizon 2 (2018-2022) and another four in Horizon 3 (2023-2028). However, the acquisition plans for each Horizon program have varied in the past, and budgetary issues could easily force the Philippines to delay or reduce its planned purchases. Potential bidders for the corvettes include ThyssenKrupp Marine Systems, Damen Group, Hyundai, and Daewoo, but this has yet to be confirmed.
On May 11, Polish news outlet Defence 24 reported on the Ministry of National Defense’s (MoND) decision to retire its fleet of SH-2G Super Seasprite anti-submarine warfare (ASW) helicopters in the near term. While a specific timeframe was not given, an MoND official stated that the original equipment manufacturer, Kaman Aircraft, is no longer providing support for the rotorcraft. Poland currently has two tenders opened to acquire up to 16 new combat search-and-rescue (CSAR) and combat search-and-rescue/anti-submarine warfare rotorcraft for the Polish Special Forces and Navy. Poland’s Special Forces would receive eight CSAR helos while the Navy would acquire four CSAR/ASW helicopters with the option to purchase an additional four. In addition to this current tender, Poland is looking to upgrade its fleet of Mi-24s and refit its Mi-8 and Mi-17 helos, shelling out $1.3 billion for the contracts by 2022. Poland’s rotorcraft requirements have changed dramatically over the last several years. Originally, the Polish Armed Forces were looking to acquire 26 multi-role helicopters for approximately $1 billion in 2014, but this was later bumped up to 50 helicopters worth $3.5 billion after Poland had pre-selected Airbus’ H225M Caracal in 2015. The deal included multi-role, ASW, and SAR helicopters. But following the election of the Law and Justice Party in 2015, the $3.5 billion deal was canceled in October 2016 after the administration claimed that the deal was ultimately not in Poland’s best interest.
On May 14, the UK confirmed that its seventh and final Astute-class SSN submarine will be named HMS Agincourt. At the time of the announcement, Defence Secretary Gavin Williamson also confirmed the value of the submarine to be worth $2.04 billion (£1.5 billion). The UK currently has three Astute-class submarines in service with the fourth, HMS Audacious, due to enter service later in 2018. The seven submarines in the class are HMS Astute, HMS Ambush, HMS Artful, HMS Audacious, HMS Anson, HMS Agamemnon and HMS Agincourt. In addition to funding the final Astute Class submarine, the UK has also committed an additional $1.2 billion (£900 million) towards the Dreadnaught program, which will see four SSBN boats delivered to replace the current Vanguard-class boats that form the core of the UK’s at sea nuclear deterrent. The funding comes at a time when the UK Ministry of Defence is keen to demonstrate that it is funding new capability despite budget pressures.
Additionally, on May 16, the UK issued an Invitation to Tender notice for its future Royal Fleet Auxiliary Fleet Solid Support (FSS) ships. The ships will provide logistical support to the Royal Navy’s surface fleet with each to have a total cargo capacity of 7000 m³ and able to sustain a speed of 18 knots. According to the notice, a contract will be awarded for the first two ships with the third covered under a contract option, prompting fears that only two ships will ultimately be funded. Between three and five suppliers are expected to submit bids, with a deadline of June 13, 2018.
The FSS competition, worth between $1.3-2 billion (£1-1.5 billion), has emerged as a new political battleground in British politics. The competition is open to international tenders which is being met with significant consternation by trade unions. It’s been argued that the ships should fall under the same classification as the UK’s warship programs, which would mean they could only be manufactured in country with obvious benefits to the UK shipbuilding industry. However, with the tender notice now issued it is unlikely that the UK government will reverse its decision to allow overseas suppliers to bid.
According to the Korean Times on May 15, the South Korean Defense Acquisition Program Administration (DAPA) will meet as early as this month to decide on the details of the upcoming contract for South Korea’s new maritime patrol aircraft (MPA). South Korea currently uses the P-3 MPA, but wants to shift to a platform that can fly longer and carry more weapons. Presently, three firms are expected to compete for the opportunity to produce South Korea’s new maritime patrol aircraft – Saab, Boeing, and Airbus. They would be putting forward the Swordfish, P-8A Poseidon, and C-295, respectively. The contract is valued at approximately $1.76 billion, and DAPA has expressed a desire for the new aircraft to be operational by 2020.
For more information about this Weekly Wire, contact email@example.com.
Analytics Users: If you’d like to see the markets discussed in any of these articles in greater depth, please visit avascentanalytics.com.