The Weekly Wire: For Your Situational Awareness 8/21/20
New among the COVID-19 pandemic’s consequences for defense spending and R&D programs in Europe, is news that the EuroDrone consortium has recently warned about potential threats that could impact the European Medium-Altitude Long-Endurance (MALE) UAV program led by Germany, France, Italy and Spain. The Airbus-led team is about to submit a new proposition to the Organisation for Joint Armament Cooperation (OCCAR) with its development, test, and production plans. However, disagreements over the allocated budget persist. The EuroDrone consortium anticipated an overall budget of €10.0 billion ($11.7 billion) for the development and production of the future MALE UAV, whereas the participating countries have requested to spend a maximum of €7.0 billion ($8.2 billion) overall. Besides this, programs delays are already impacting possible service introduction, which was initially planned for 2025 but is now pushed back to 2028 at the earliest.
These differences are likely to persist in the coming months due to financial restrictions and reprioritized investment programs, other challenges are also foreseen in the development roadmap, such as the respective future European combat aircraft programs. On one side is the Future Combat Air System (FCAS) program in Germany, France and Spain, and on the other side the Tempest program gathering the UK and Italy. The questions of the impact of Brexit and Italy’s commitment to participation remain open. Furthermore, integration of the future MALE UAV in the FCAS networked collaborative environment will have to be designed in the earliest Euro MALE development stages to ensure program viability as future orders in Germany, Spain and France will be dependent on this functionality.
On August 14, the US Department of Defense announced an indefinite delivery/indefinite quantity (IDIQ) contract with Lockheed Martin for F-16V fighters worth $62 billion over 10 years. The unusually high number accounts for an unusual contracting structure for fighter aircraft, though IDIQ contracts are common in government contracting in general. $62 billion only represents the full contracted amount if all customers exercised all options available to them. The IDIQ contract is a result of a US Air Force push to “commoditize” the F-16, which would provide a standard price and operating cost for a base F-16. Customers can then order extra modifications on top of the base version. This is opposed to customers placing smaller orders which often contain a wide range of customizations that take extra time and money to develop. Despite increasing numbers of fifth generation fighter aircraft, there is still strong demand for more affordable fourth generation fighters like the F-16. The first aircraft produced under this contract will be 91 F-16s, most likely for Taiwan and Morocco. The US State Department has approved up to 66 for Taiwan and 25 for Morocco. Below is a list of countries that could potentially order the F-16V (as new aircraft or upgrades to older F-16 models) and estimated quantities over the next decade:
- Botswana – 12
- Chile – 44 (upgrades)
- Colombia – 12
- Croatia – 12
- Hungary – 12
- Indonesia – 32
- Iraq – 18
- Jordan – 10
- Jordan – 50 (upgrades)
- Oman – 15
- Philippines – 12
- Poland – 48 (upgrades)
- Romania – 36 (upgrades)
- Thailand – 24
This list notably omits a potential Indian acquisition of 114 fighters, as this acquisition would be made through a direct commercial sale rather than through the Foreign Military Sales process due to the Make in India requirements.
Last week, the Canberra-based Australian Strategic Policy Institute (ASPI) released its annual Defence Strategic Update brief. The publication comes on the heels of the 2020 Force Structure Update and the 2020 Defence Strategic Update released by Australia’s Department of Defence last month. ASPI’s annual publications offer a deep dive into Australia’s national defense budget, as it breaks down spending into easily digestible categories such as acquisition, personnel, and operations in both the near and long-term. For the 2020-2021 funding period, the organization estimates:
- Acquisition spending at AUD 14.4 billion (USD 10.4 billion);
- Personnel spending at AUD 13.5 billion (USD 9.8 billion) and;
- Operations spending at AUD 14.2 billion (USD 10.3 billion)
For the 2029-2030 funding period, ASPI estimates a surge in spending for the same categories:
- Acquisition spending to reach AUD 29.2 billion (USD 21.2 billion);
- Personnel spending to AUD 19.2 billion (USD 13.9 billion) and;
- Operations spending to AUD 25.3 billion (18.3 billion)
Notably, ASPI’s figures account for a significant uptick in the proportion of acquisition spending foreshadowed by the Department of Defence last month. In that connection, ASPI’s projections appear to assuage concerns that COVID-19 might bring about adverse short-term impacts on Australia’s defense budget.
On August 18. it was announced that Hungary would become the first customer for Rheinmetall’s KF41 Lynx Infantry Fighting Vehicle. Hungary has signed an agreement with Rheinmetall worth over €2 billion ($2.3 billion) for a new joint venture to be established to produce the vehicles locally. The procurement of the KF41 continues Hungary’s land modernization efforts with the army to be equipped with 24 PzH2000 self-propelled howitzers and 44 Leopard 2A7HU main battle tanks. Rheinmetall also benefitted from both deals, securing a €300 million ($353 million) contract in 2019 to produce the hull and guns for both platforms.
On August 17, the Israeli Defense Force had decided to ground all Black Hawk helicopters, with an exception for those involved in operational missions. The decision came after an undisclosed number of technical malfunctions in the helicopters’ motors over the last two months. One such malfunction occurred while a Black Hawk helicopter was transporting the commander of the Israeli Air Force – although the aircraft was able to land safely. Israel’s fleet of Black Hawk helicopters were delivered from 1994-2002 and are used for transporting personnel both between bases and to combat zones. While the Black Hawks are grounded, technicians will inspect their motors to try and determine the cause of the recent malfunctions. This is the second time an Israeli rotorcraft fleet has been grounded following technical issues in the last year, as Israel’s CH-53 fleet was grounded following a fatal crash in 2019.