The Weekly Wire: For Your Situational Awareness 5.24.17
On May 11, the Pentagon awarded Boeing a $488 million contract to remanufacture 38 current-serving British Army AH-64D Apache attack helicopters to E-variant status. Work is expected to be completed by 2024. The deal follows a contract for 50 Apaches announced in July 2016 worth $2.3 billion. The new-buy E-variants were initially reported to serve as replacements for the British Army’s fleet of 50 AH-64s. This deal confirms that the UK intends to retain its D-variant units while procuring additional E-variants and effectively double its fleet size. The UK’s Apache purchase is one of the bright spots in the European attack helicopter market in the out years. Avascent Analytics estimates that the addressable market is expected to shrink each year through 2021.
Oman is expected to receive its first Eurofighter Typhoon by the end of 2017. This fighter is part of a set of twelve aircraft ordered in 2012, along with eight Mk 166 Hawk trainer aircraft. Oman already owns a fleet of F-16s which were recently upgraded, so the new Typhoons will likely serve as a complement to, rather than a replacement for their current fighters. According to Avascent Analytics, the market for fighter aircraft in Oman has an annual value of $472 million, but is shrinking at a rate of 8.7% – likely due to most of the major purchases having already been made.
On May 16, Singapore signed a contract with Germany’s ThyssenKrupp Marine Systems (TKMS) for two more German-made 218SG submarines. The submarines will join the two 218SG submarines Singapore procured from TKMS in 2013 which are expected to be delivered in 2021 and 2022, while the ships from the most recent deal are expected to be delivered by 2024. While no contract value was mentioned, previous reports stated that the original 218SG contract was worth $1.8 billion. The two new 218SGs are expected to replace Singapore’s aging Archer-class submarines that were procured from Sweden and underwent modernization in the early 2000s.
Germany requested information on the F-35 program this month as they look to replace their fleet of Tornadoes and Eurofighters. The German Air Force’s aging fleet of Tornadoes were first delivered in 1979, of which 85 of the aircraft are still operational, while Germany received the first tranche of Eurofighters in 2002. Germany is looking to potentially replace their fighter aircraft fleet between 2025-2035, though no formal procurement plan has been laid out. In April 2017, Germany and Airbus discussed building a future combat air system that would likely be a twin-engine and twin-tail aircraft. It remains unclear how many units the German Air Force would procure and the total value of the procurement as well as whether Germany is looking into other options for replacing their fighter jets.
Chile’s defense ministry has approved plans to procure two new submarines by 2025. A request for proposals is expected soon, and a contract is expected to be awarded by 2020. The new boats will replace the country’s two Type 209 diesel-electric attack submarines, which are set to retire after 40 years of service. The Chilean Navy also operates two Scorpene-class submarines and is building a small, 250-ton light combat submarine. Chile is one of three Latin American countries to purchase submarines in the last twenty years, in addition to Brazil and Colombia. The maritime border dispute between Chile and Peru remains a primary driver of Santiago’s naval spending.
On May 17, Spaceflight Inc., a firm that arranges launches for small satellites, announced that it will purchase a launch from Rocket Lab aboard the Electron vehicle. While the mission’s launch date is still to be determined, the launch cost will likely be about $5 million if it aligns with previously quoted prices. Rocket Lab will be using this launch to showcase its ability to place payloads in less common orbits—a key part of their business proposition and a factor that distinguishes it from traditional launch companies. Avascent Analytics expects the firm to grow in the next two years. Although Rocket Lab has at least 23 fully-booked Electron launches scheduled on its manifest before 2019, Avascent Analytics currently projects approximately ten Electron launches through 2018. Uncertainties inherent in launch vehicle development could alter Rocket Lab’s stated schedule.