LOCKHEED MARTIN is examining the possibility of licensing F-16 production to Brazil, with Embraer forming the core of an assembly programme for several South American countries.
Senior Lockheed Martin sources confirm that licence production is one of several options being considered to secure the South American market.
Although US legislation blocks the sale of advanced weapons to Latin America, Lockheed Martin officials believe that the Government will ease its rules in the near future.
Brazil's fighter-procurement project, dubbed FX, is aimed at replacing its Dassault Mirages. Deliveries of the first aircraft are pencilled in for around 2005.
Argentina, Chile and Peru also have emerging fighter-replacement programmes, which could potentially be bundled into a combined procurement.
A more immediate export opportunity for Lockheed Martin is in the United Arab Emirates, which has a strike-fighter requirement for more than 40 aircraft.
Lockheed Martin says that the company has been informed by the UAE that it has been "down-selected", while the competing McDonnell Douglas (MDC) F-15 had been eliminated.
Herb Lanese, president of McDonnell Douglas Aerospace, says that as far as the UAE is concerned, "-we haven't received any word officially-It may be right, but we haven't heard." Lanese adds: "In the Middle East, it is not over until it's over."
Lockheed Martin officials say that the sole F-16 rival is the Dassault Rafale. Continuing activities with the Eurofighter EF2000 in the region, however, indicate that this aircraft may also still be in contention.
The UAE is considering the F-16 "Block 60" - an upgraded, extended-range variant.
Although Lockheed Martin remains reluctant to discuss in detail its submission, the aircraft is likely to include a nose-mounted infra-red sensor and laser designator, overwing conformal fuel tanks and an advanced radar, possibly the Northrop Grumman APG-78.
Weapons are believed to include the Hughes AIM-120 AMRAAM, MDC AGM-84, Texas Instruments GBU-24 and the HARM anti-radiation missile.
Source: Flight International