Huge Orders for Jet Fighters May Force Consolidation for ContractorsJuly 01, 2009
 European jet fighter makers anticipate the biggest surge in orders since the Cold War, but this time survival is at stakes for some of the manufacturers, according to an article in the British paper The Times. With more than $100 billion of business likely, the companies that win the contracts will secure multi-billion revenue streams for decades while the losers could be forced out of the jet fighter manufacturing business. The investment needed to develop new jets is so high, that the losers will not have the ability to compete in the future, according to the article. One of the winners is expected to be BAE Systems, Europe’s largest defense contractor. It is currently part of a consortium building the Eurofighter Typhoon, a leading contender in many of the competitions, The Times reported. On the losing end, the future of Rafale, France’s independent fighter program, is threatened if it cannot secure at least one major contract. Russia’s MiG could become an option that only second-tier militaries would consider. Meanwhile, Sweden’s Gripen needs several big wins to even stay in production. "This is the last roll of the dice for some of these aircraft", a senior defense source told The Times. The only hope for some of these players if they don’t win major contracts might be to join an international project, such as the Joint Strike Fighter. BAE currently is a top contender with its Typhoon in the Middle East and Japan, and it has submitted bids in India. The Japanese are thought to want the Lockheed Martin F22s at $250 million each, but the United States does not permit these jets to be exported. In a blow to Lockheed, the Pentagon has said that it will not buy any more F22s and it may be willing to loosen export rules. If the U.S. does not allow the F22 be exported, the Typhoons are the next top choice for Japan. If BAE wins that bid, it would open a new market for BAE, according the article. (Eurofighter Typhoon 2009) |
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