The combat aircraft market is estimated to be worth some $88 billion over the next decade.

Douglas Barrie/LONDON

WHILE MANUFACTURERS in the traditional combat-aircraft producing nations have been forced to take serious stock of the changed world in which they operate, their home countries have not stopped buying defence equipment.

Projected purchasing patterns have been reshaped to reflect the changed circumstances in which these countries' forces will have to operate during the first few decades of the 21st century. In attempting to offset the downsizing in their own "safe" markets, manufacturers are even more aggressively addressing the export market.

Many military projects were cancelled after the Cold War ended. Notable victims have included the US Navy's McDonnell Douglas (MDC)/General Dynamics A-12 Avenger II, while the US Air Force's Northrop Grumman B-2 bomber programme was cut to the bone. Even the procurement of the Lockheed Martin/Boeing F-22 fighter for the USAF has been substantially curtailed.

While the cuts in the USA were severe, they paled into near insignificance when compared with the pruning suffered by its bygone enemy, now turned competitor, the former Soviet Union.

Significant projects which disappeared included Mikoyan's replacement for the MiG-31 Foxhound (Project 701) and Sukhoi's Su-37, the intended replacement for the Su-25 Frogfoot.

Some factors, however, have made the plight of the remaining defence aerospace manufacturers in the former USSR that much more parlous than that of their US and European counterparts. Russian designers, for example, were at the mercy of an archaic research, development, procurement and production structure, which was totally dependent on central control.

The collapse of the Soviet Union also effectively, marked the end of "traditional" combat-aircraft development and procurement in Russia. The design bureaux have been forced to try to emulate their Western counterparts by becoming manufacturers, rather than just prototype and derivative-model developers.


Mikoyan has established a joint venture with its main Moscow production plant, and now exists under the MAPO-MiG banner, while Sukhoi has also established links with the production plants nominally associated with the mass manufacture of its designs.

Manufacturers, also suffered through the lack of a Russian equivalent, to the USA's Bottom Up Review (BUR). The BUR may not have been popular among US manufacturers, but it gave them a structure within which they could plan and work. There has been no implementation of a revised strategic-procurement template in Russia.

There have been attempts to forge a revised strategic procurement plan. Anatoly Belosvet, the deputy head of MAPO-MiG, for example, has repeatedly called for a rationalisation of air-force projects.

Addressing a recent parliamentary hearing on the future of the Russian aerospace sector, he pointed to the USA having only a few core projects, while Russia continues to pursue a variety of programmes spawned in the final years of the Cold War. None of these projects is receiving adequate funding to bring them to completion, including MAPO-MiG's own Article 1.42 fifth-generation fighter.

In comparison, US manufacturers have a solid grasp of the shape and size of their home market. They have also taken steps to place the industry on an aggressively competitive footing in the international marketplace through mergers, the most significant so far being the Lockheed acquisition of General Dynamics' tactical-fighter business, and Lockheed's subsequent merger with Martin Marietta.

It has also become clear that MDC is looking to ensure the long-term viability of its combat-aircraft business beyond the F-18E/F, which will form the core of its activities over the next two decades.

Coverage of the reported talks between MDC and Boeing focused on the commercial-aircraft sector, but a tie-up between the two would have military-aircraft implications for the Joint Advanced Strike Technology programme (JAST). The prize of procurement of up to 3,000 JAST-derived aircraft (should the programme deliver) is a major driving force for US industry. Boeing, as a second-tier military player, needs a partner and, so far, its overtures to Lockheed Martin have come to nothing.

The latter has the comfort of the F-22 programme, despite procurement being cut from a projected 750 to 442 aircraft. This, coupled with the likely continued success of its F-16 in the export arena, places the company in pole position in the combat-aircraft market. Lockheed Martin is the company, which all others will have to beat in winning export orders.

Unlike its Atlantic ally, Europe has shown sluggishness in reacting to the changes of the past five years. The only concrete move made by any manufacturers is the tie-up between British Aerospace and Saab on an export derivative of the latter's JAS39 Gripen, dubbed the JAS39X.


All three (or four, including MAPO-MiG's Article 1.42) of Europe's close-coupled delta-canard fighters have fallen foul of technical and political problems. Dassault's Rafale has suffered its share of technical teething troubles and the programme is now beset by budgetary problems. The Gripen has suffered from difficulties with the flight-control system, as has the Eurofighter 2000. The latter programme has also had to contend with one partner, Germany, suffering an almost continuous bout of the jitters. The entries of all of these aircraft into service have been delayed, and this will inevitably have an impact on how they are perceived in the export market.

French military-aerospace manufacturers will also now have to contend with a "pressure-cooker" environment. For too long France has supported a defence sector which the national economy could not justify. The reaction from French industry has been predictably shrill, although programme cuts appear inevitable.

In the Cold War era, the combat-aircraft marketplace was easily defined by the bi-polar power structure. Client states of the superpowers "bought" their combat aircraft from their respective patrons, with a limited number of non-aligned countries buying from both.

This approach has fallen by the wayside - a multi-polar security environment engenders what is, in effect, a buyer's market, with air forces able to browse through almost all of the combat aircraft on offer, irrespective of ideology - although some former Warsaw Pact states seem determined not to select their next generation of fighters from those available from the former Soviet Union.

The marketplace can be broken down into home or captive markets in the case of both Western and Russian manufacturers, and then various regional export arenas - Africa, Israel, the Middle East, the Pacific Rim and South America.

Both the USA and Russia will remain closed to foreign combat-aircraft manufacturers acting as prime contractors for the foreseeable future. As far as European manufacturers' home territories are concerned, the situation is more fluid, as evinced by the Royal Air Force's predicament in the UK.

Repeated postponement of the in-service date of the Eurofighter 2000 has forced the RAF to examine how to supplement its current air-defence capability. The Panavia Tornado F3 needs either to be replaced, or upgraded, to bridge the gap until the Eurofighter 2000 becomes available around 2005-6.

As well as looking at providing F3 units with an active-radar-guided air-to-air missile in the shape of the Hughes AIM-120 (instead of the semi-active British Aerospace Skyflash), the Ministry of Defence has also costed the option of leasing F-16s - a move which would deal a serious blow to Eurofighter in the export market.

While BAe has lobbied furiously behind closed doors in Whitehall, the most vociferous condemnation of this option has come from France's Serge Dassault, head of Dassault Aviation. He asks: "How could you co-operate with a European country which buys American?" His stinging view, however, is that the Eurofighter " finished - it doesn't work." This view is dismissed by British Aerospace Defence chairman John Weston, who contends that the Eurofighter flight-test programme is going well.


At the heart of Dassault's outburst is an ill-concealed attempt to damage one of the Rafale's main export competitors. Believing in the adage that the best form of defence is attack, he appears to be trying to distract attention from the plight of the Rafale by kicking out at the competition.

His comments, however, are likely to reflect the tone of export battles, as the marketplace becomes tougher.

An observer, need look no further than the United Arab Emirates (UAE) strike-fighter competition, to see the likely pattern of future procurement battles. With the UAE having a requirement for up to 80 strike aircraft, all of the major manufacturers are pitching for the business. The US contenders are the F-15U, a derivative of the F-15E, and the F-16. France is offering both the Dassault Mirage 2000-5 and the Rafale, while Russia's Sukhoi is pushing derivatives of the Su-27 Flanker and MAPO-MiG is promoting the MiG-29 Fulcrum. BAe is offering the Panavia Tornado IDS as a bridging measure until the Eurofighter 2000 becomes available.

French ambitions to secure an initial export customer for the Rafale are almost certain to have been damaged by statements from French air force chief of air staff Gen Jean Rannou. Shortly before the Dubai air show in November, Rannou advocated delaying procurement of the Rafale for the French air force until 2010, and instead purchasing more Mirage 2000-5s. Such comments are unlikely to rest comfortably with potential export customers.

While the UAE's strike-fighter competition could be resolved by early 1996, the region's other main procurement programme may be a longer-term effort. The Royal Saudi Air Force (RSAF) has a requirement for more than 100 aircraft to replace its Northrop F-5s. Lockheed Martin is proposing F-16C/Ds, although any deal appears to be dependent on a buy-back and re-sale option on the F-5s. Other US contenders could include MDC with the F-18, but this aircraft greatly exceeds the requirement.

Other competitors include BAe, which is hoping to address the F-5 replacement through its Al Yamamah 1 and II arms packages. Originally, BAe had proposed derivatives of its Hawk to meet the RSAF requirement, but senior sources now indicate that the company regards the JAS39X as a better-suited contender.

Other regional requirements include a small fighter purchase by Jordan, with that country almost certain to receive 12 ex-USAF F-16s. Lockheed Martin could also sell Egypt up to a further 30 Block 40 F-16C/Ds.


Iran and Iraq also have requirements to upgrade their combat-aircraft fleets. Given the political stigma attached to both these states by the West, combat-aircraft sales to these countries will come either from Russia, or China. Iran, in particular, is looking towards Russia to provide an advanced combat-aircraft capability with the sale of the Su-27 Flanker, or derivatives. China may play an increasingly important role in the export market as the 21st century progresses beyond its first decade.

Lockheed Martin is also vigorously pursuing potential F-16 sales in the European theatre, on both sides of the old political divide. The Czech Republic, Hungary and Poland all have requirements to replace their predominantly Mikoyan-supplied fighter fleets, ranging from the venerable MiG-21 Fishbed to the MiG-29 Fulcrum. Lockheed Martin is thought to be keen to assemble a second European F-16 grouping similar to that of Belgium, Denmark, Netherlands and Norway.

Saab, with the support of BAe, is trying to spoil Lockheed Martin's grand plan by offering the Gripen to Hungary. The potential export deal has been couched in terms of a larger Sweden/Hungary industrial package, but the Gripen remains at the heart of any agreement.

Lockheed Martin also has high hopes of securing a repeat F-16 order from Norway, which is seeking a replacement for its Northrop F-5s. The programme is estimated to be worth some $2 billion.

Under current plans, the F-5s are to be withdrawn from Norwegian air force service between 2000 and 2004. With the air force already an F-16 user (it bought 72 F-16A/Bs, now being upgraded under the mid-life update programme), Lockheed Martin is hoping to sell additional F-16C/Ds to replace the F-5s.

BAe, Dassault and Saab hope to persuade Norway to buy the Eurofighter 2000, Rafale, or JAS39, respectively, but the safe money appears to be on additional F-16s. This, however, leaves the competition open for a Norwegian F-16 replacement programme, which is being pencilled in from around 2010.


The Norwegian competition highlights both the strengths and weaknesses of the F-16 in the export arena. In the short term, the F-16 will remain the dominant competitor in the single-engine/medium-fighter marketplace. The question of what comes after the F-16 is a problem for Lockheed Martin, and one, which its competitors will increasingly attempt to exploit.

BAe's Weston, in beginning to position the JAS39X against the F-16, claims that the Swedish aircraft has a significantly greater all-round combat capability.

Mickey Blackwell, president of Lockheed Martin's Aeronautics sector, is all too aware of the competition's attempts to lever advantage out of the "age" of the F-16. He has admitted that the company has looked at alternatives to replacing the F-16, although, so far, the aircraft appears to be its own successor.

In attempting to address specific export niches in Israel and the UAE, Lockheed Martin has offered tailored derivatives of the F-16 - the F-16ES for the Israeli air force and the F-16U in the UAE. On both occasions, the requirement was for an extended-range strike aircraft and, on both occasions, the aircraft has failed. In Israel, the F-16ES lost to the MDC F-15I, while, in the UAE, the F-16U, an advanced big-wing variant of the F-16, is understood to have been discounted on cost grounds. The UAE is still being offered other F-16 variants.

The final collapse of the delivery of additional F-16s to Pakistan was also a blow to Lockheed Martin. This deal foundered on the US Government's unhappiness with Pakistan's nuclear-weapons programme. France's Dassault, meanwhile, has been quick to exploit the market opportunity by offering Mirage 2000-5s. Pakistan has a requirement for around 40 aircraft.

In this region, Pakistan has traditionally procured from the West, while its main regional competitor, India, has tended to procure its combat aircraft from the Soviet Union, with occasional dalliances with France and the UK. Pakistan, however, has also looked at derivatives of the Su-27 Flanker.

India continues to look to Russia as its primary supplier of combat aircraft. Financial difficulties aside, it has to cope with an aging fleet of combat aircraft, including MiG-23/27 Floggers and MiG-21s, which it needs to replace. In the case of the Floggers, it is looking at procuring the Su-30MK, a two-seat multi-role derivative of the Flanker. This deal, if concluded, would mark the first sale of this model, and would also loosen MAPO-MiG's hold on India as its sole Russian fighter supplier.

India has also embarked on its own indigenous fighter-/attack-aircraft programme, the Light Combat Aircraft (LCA). Although the prototype was rolled out in November after a decade of development, the LCA project remains far from secure, despite Indian ambitions to enter the fray as a combat-aircraft exporter.

Delays to the programme have already forced the air force to plan an upgrade for much of its Fishbed fleet. Western and Russian manufacturers continue to track the LCA programme, should it falter. MAPO-MiG is believed already to have dangled the bait of licence production of the advanced MiG-29M (MiG-33) variant of the Fulcrum.

A year ago, such a possibility appeared remote. The MiG-29M programme was in abeyance, with no sign that the Russian Government intended to fund the remaining development effort. In May, the Government claimed that it would fund completion of the aircraft's development. Mikoyan is now ready to carry out the final test flights. Despite promises, Government money has yet to materialise.


Both Sukhoi and Mikoyan have also scored recent successes in the Pacific Rim. MAPO-MiG sealed a deal with Malaysia for the delivery of 18 Fulcrums, while Sukhoi won an order for around six Su-27s from Vietnam. A follow-on order for a similar number of aircraft may also eventually be forthcoming from Vietnam.

While, in numerical terms, these sales are small, they have considerable significance in that Russia has successfully broken the Western manufacturers' leadership in the area. With the release of the fully active radar-guided R-77 (AA-12 Adder air-to-air missile) into the region, there has been a clamour for the USA to release the Hughes AIM-120 beyond-visual-range (BVR) weapon.

Thailand had made its choice of a US fighter, the MDC F-18C/D, dependent on the release of the AIM-120, with countries such as Singapore also keen to have an active BVR missile capability.

While US manufacturers have continued to be successful in this region, with Indonesia, the Philippines, Singapore and Thailand all having recently ordered or favoured US purchases, China, the main regional prize, remains out of their reach.

China offers a potentially massive combat-aircraft market, with Sukhoi having sold around 50 Su-27 Flankers in two batches. China and Russia are now negotiating over licence-manufacturing rights for the Su-27 to meet Chinese air force requirements. This could result in China producing up to 200 Su-27s. It could also offer a "cheap" Flanker for export in competition with Sukhoi, much as China has marketed derivatives of the MiG-21 under the F-7 tag.

Chinese manufacturer Chengdu has embarked on development of a single-engine fighter, the F-10, which draws heavily on Israel's cancelled Lavi programme. Israel Aircraft Industries has been providing technical assistance on the Chinese programme, and the first prototype could be flown by mid-1996. The powerplant and radar for the F-10 are from Russia.

Should the project prove successful, China would produce around 250-300 of the aircraft to meet its air force requirements. It would also push it aggressively into the export market as a successor to the F-7, some 400 of which have been exported to Egypt, Iran, Iraq, Myanmar and Zimbabwe.

In the nearer term, China is attempting to push two other projects in the export arena - an upgraded variant of the Shenyang F-8II with Russian avionics and radar, and the FC-1, which is aimed at a Pakistani requirement for up to 150 aircraft. The FC-1 is being designed with Russian help. Pakistan is expected to decide in the next 12 months whether it will go ahead with full financing of the programme.


Should the FC-1 and/or the F-10 come to fruition, then China would pose a growing challenge to Russian manufacturers in particular. The F-10, suitably equipped with advanced avionics, could prove a challenge to the Gripen and derivatives of the F-16 in most non-Western markets beyond the first decade of the next century.

Another potential regional competitor in the light-medium fighter arena is South Korea's KTX-II programme, should a product ever emerge. The South Koreans continue to court Lockheed Martin as a potential partner, and it is conceivable that the project could emerge as a potential successor to the F-16.

Japan continues with the expensive Mitsubishi F-SX programme, based around the F-16, and it remains to be seen whether industry will attempt to recoup some of its investment by trying to find export customers for the aircraft. Japan has also begun to look at the design of an indigenous combat aircraft beyond the F-SX, to replace its MDC F-15s. This embryonic requirement is likely to have caught the eye of Lockheed Martin/Boeing as it begins to look as a limited, although potentially lucrative, export market for variants of the F-22.

Like Japan, Taiwan has also used the F-16 as the template, this time for its indigenously developed fighter, the A-1 Ching Kuo. Technical problems have beset the programme, with some 40 production aircraft expected to be grounded for around six months as problems with the fuel system are resolved. The prospects of success on the export market are not good.

Despite Chinese, Indian, South Korean and Taiwanese aspirations, the next ten years will be dominated by European, Russian and US manufacturers. US market-research house, The Teal Group, foresees Lockheed Martin and BAe (tied with Saab) emerging as the two dominant Western manufacturing camps. According to Teal, these two could share 40% of the market in the next century, with Dassault, MDC and Sukhoi fighting over the bulk of the remainder.

The group also predicts that MAPO-MiG is going out of business. While its fifth-generation project, the Article 1.42, may only be bound for Monino as a museum piece, the MiG-29M could yet be the means to rescue the famous name. An upgraded Fulcrum could yet be ordered by the Russian air force and win exports.

The outcome of the JAST project will have a substantial impact on the two main US manufacturers. Were MDC to walk away empty-handed from the competition, it would have no fighter programme on its books beyond the F-18E/F. Conversely, were Lockheed Martin to emerge with the JAST tucked under its wing, it would further bolster its dominance, both in its home market and in the export environment.

The Royal Navy has already signed up for whatever emerges from the JAST programme as its advanced short take-off and vertical-landing replacement for its BAe Sea Harrier F/A2s. BAe, recognising the potential importance of the JAST, has teamed with MDC for this programme.

In Europe, consolidation among the manufacturers remains as inevitable as it seems remote. While Dassault, (with its Rafale) and BAe (leading the Eurofighter 2000 and JAS39X export efforts) will increasingly battle it out, for sales in the international theatre, future projects will have to be collaborative, if they are to take place at all. The role of the lesser participants (and this now includes Germany, besides Italy and Spain), will also have to be determined.

Despite the Teal Group prognosis on MAPO-MiG, which may yet prove wide of the mark, Russia will continue to remain a major player in exporting military combat aircraft.

What will determine the extent of Sukhoi's and Mikoyan's success is in part dependent on requirements within Russia, and also on whether they can overcome the justified perception that maintenance and support of Russia combat aircraft remains problematic.


What is readily apparent is that, while in the West and Russia combat-aircraft requirements have been reduced, they have not disappeared. Fleets may last longer, but they will still need to be replaced. In the Middle East, there is a sizeable, if stable market, while, in the Pacific Rim, economic growth is providing the budgetary wherewithal for substantial combat-aircraft re-equipment projects.

A decade from now, Western manufacturers, along with their Russian competitors, may still hold the whip hand, but there is also likely to be competition from some new quarters.

Source: Flight International