By Avascent Analytics team
The Royal International Air Tattoo gets underway on Friday with the Farnborough Airshow following immediately on Monday. Ahead of these two highlights on aerospace calendars, Avascent’s London office head, Joe Walsh, sat down with Associate Ian Ferguson and Analysis Manager Ben Goodlad to discuss what announcements, demonstrations, and reveals we can expect to see – and which we won’t – from both commercial as well as military aerospace partners. Click here to listen to the podcast.
A quick look at the biggest stories of the week
India • Pakistan • New Zealand • Slovakia • Sweden
On June 28, India’s Defense Acquisition Council approved the purchase of five S-400 air defense systems worth an estimated $3.2 billion. The deal reflects growing airborne threats on India’s border from China and Pakistan, as well as India’s close defense relationship with Russia stretching back to the Cold War. India remains Russia’s most valuable and important defense market. However, the S-400 deal could throw a wrench in bilateral relations with the United States. The US government recently passed the ‘Countering America’s Adversaries through Sanctions Act’ (CAATSA), which imposes sanctions on those engaging in transactions with Russia’s defense sector. Almaz-Antey, the manufacturer of the S-400, is on a list of 39 Russian entities liable to sanctions.
On July 5, Pakistan signed a contract for the acquisition of four MILGEM corvettes (also known as Ada-class in Turkish service) from Turkey. The letter of intent for the acquisition was signed in May 2017. Two of the ships will be built in Turkey by Istanbul Naval Shipyard, and another two in Pakistan by Karachi Shipyard and Engineering Works (KSEW). Pakistan will receive a customized version that will integrate some Pakistani subsystems and weapons. This is expected to lower the cost per ship to about $250 million, as opposed to the $300 million that Turkey paid for its Ada-class corvettes. Since 2016, Pakistan has placed orders of Turkish defense products and services worth about $2.5 billion, including 30 T129 ATAK attack helicopters for $1.2 billion, and upgrades for three Agosta 90B submarines for $350 million.
On July 9, New Zealand Minister of Defence Ron Mark announced that New Zealand will acquire four P-8 Poseidons from Boeing. The $1.6 billion deal would see New Zealand replace its fleet of six P-3 Orions acquired between 1966 and 1985, and includes the training and infrastructure. New Zealand will become the fifth export customer for the maritime patrol aircraft. The P-8, which will form the core of the Airborne Surveillance and Response Force, will be delivered from 2023 onward. As part of the announcement, Minister of Defence Mark also announced that the upcoming Defence Capability Plan will layout complementary maritime surveillance capabilities, including remotely piloted aircraft and satellite surveillance.
On July 11, Slovakia approved a plan to buy fourteen F-16 Block 70 fighters from the US. This is the culmination of an ongoing debate in Slovakia about leasing versus purchasing new Gripens or the F-16s. Past attempts at reaching lease agreements for Gripen fighters fell through due to the high asking price for the lease. Now it appears that the F-16 has won this competition and will be replacing Slovakia’s aging inventory of MiG-29s. The anticipated value of the contract is $1.86 billion, but a formal contract has not yet been signed.
Despite reports in early June that Sweden was weeks away from signing a deal to acquire Patriot air-and-missile defense (AMD) systems, opposition leaders are now calling into question whether the government will have enough funding to cover the acquisition. According to an assessment released by the Swedish Armed Forces, Sweden’s defense budget for 2019-2020 is not sufficient to maintain day-to-day operations nor will it be able to cover all planned procurements for those years. Concerns over potential defense budget constraints have prompted Swedish politicians to seek an alternative, namely funding the Patriot acquisition outside of the defense budget. Sweden’s Christian Democrat party is threatening to prevent the deal from moving forward unless the government allocates spending outside of the defense budget to buy the AMD systems. Sweden chose Raytheon’s Patriot AMD system over the SAMP-T last year with the acquisition worth approximately $1.1 billion and deliveries expected to begin in 2021.
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