Many Questions at Paris Air Show, But Few Answers
(Source:; published June 12, 2009)

(By Giovanni de Briganti)
Britain must decide by the end of the month if it agrees to extend the A400M's contract talks by six months, as France and Germany have proposed. (Airbus photo)
PARIS --- With the global crisis smothering the commercial aircraft market and ensuring visitors are spared the usual overwhelming litany of multi-billion dollar airliner deals, this year’s Paris air show could for once have uniquely focused on the military market. Alas, that is unlikely to be the case, as most significant decisions are being put back to the second half of the year or later, leaving room for little more than speculation and marketing fizz at the show. No doubt the organizers would have wished a more upbeat context for the show’s 100th anniversary.

The only significant question still open for the commercial sector is whether Boeing’s 787 Dreamliner will make its long-delayed first flight during the show. If it doesn’t, and Boeing misses this unique showcase to make the announcement, observers may suspect that it has run into new problems; if it does, possibly with a rumored new order to boot, Boeing will have scored a great P.R. coup in its competitor’s back yard.

But no such heart-lifting event is likely in the military field. A case in point is the Airbus A400M military transport aircraft, now running years late and still with no clear indication of when it will make its first flight, even if prime contractor Airbus Military says it could take place in December, with initial deliveries then to follow in late 2012 or early 2013.

In April, the program’s seven launch countries agreed to a moratorium until the end of June as they negotiate how to pursue the program. There is no serious indication the program will be canceled, although Britain is said to be taking a hard line, and all signs point to France, Germany and Spain accepting the delay, and bailing out EADS, as long as a new, binding contract sets out credible cost, financing, milestones, technical specifications and delivery dates.

A400M Moratorium Extended

In fact, the moratorium will probably last longer. France and Germany have agreed to extend it for six months, French President Nicolas Sarkozy said June 11 during a joint press conference with German Chancellor Angela Merkel. “We discussed the A400M and decided it would be good to give ourselves another six months to find the best possible solution,” Sarkozy said, while Merkel added that “we are in full agreement….we will give ourselves a few more months and then we’ll see,” adding that, in any case, both countries need a transport aircraft.

They must now convince the other partners, however, and while Spain supports the program Britain, Italy and Turkey may not be as amenable.

The extra cost of putting the program back on track, and of fixing technical problems related to the TP400M engine, to various mission systems and to aircraft performance has been reported at over 5 billion euros, an extra 25% compared to the original 20 billion euro contract for development and production of 180 aircraft.

Defense ministers from the partner countries are to meet at the end of June in Seville, Spain, to discuss progress, Spanish Defense Minister Carme Chacón said June 11. The meeting is scheduled for June 22, sources say.

A significant change is that OCCAR, the program’s executive agency, has been sidelined for these negotiations, and partner governments have deputized the Belgian Minister of Defense to handle negotiations with industry.

In the meantime, prime contractors EADS and Airbus Military continue negotiating with Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey to resolve contractual issues. These talks focus on whether contractual penalties should be levied on Airbus for missing the milestones; the revision of unit prices; the replacement of Gross Domestic Product as the benchmark for cost escalation clauses, and the final number of aircraft to be bought by each country, French Senator Jacques Gautier, the author of a detailed report on the program, said during a June 11 French Senate debate.

British industry is keen to keep the program alive, and in remarks prepared for the air show Ian Godden, Chief Executive of the Society of British Aerospace Companies, said that “Despite the well-publicised teething troubles….this project deserves the support of the current Government and future administrations given the economic benefits it delivers to the UK alongside the military and engineering capabilities it safeguards for Britain.”

Airbus CEO Tom Enders says that partner countries must first decide whether the A400M is the aircraft they want and whether the new delivery schedules offered by Airbus are acceptable. Finally, they must agree to new financial terms, hesaid in an interview with the Paris financial daily Les Echos. Under the current contract, Airbus could be liable for as much as 1.6 billion euros in penalties and fines, with additional damages due for each aircraft delivered late.

Playing the employment card, Enders noted that 40,000 people in Europe are working on the A400M. He added that Airbus was not alone in having contributed to the program’s woes: partner governments were “not entirely innocent” because they had pressured Airbus to accept unrealistic contract terms, while the A400M “would have flown as planned last October if the engines had been available.”

Fighter Decisions Slipping

To the surprise of practically nobody, the schedule for India’s competition to buy 126 Medium Multi-Role Aircraft for about $10 billion has started to slip. Although the Indian Air Force completed evaluation of the six competing offers (Boeing F-18E/F, Lockheed-Martin F-16I, Saab Gripen NG, Dassault Rafale, Eurofighter Typhoon and Russian Aircraft Corp.'s MIG-35) in May, in-flight evaluation in India cannot begin until three months after the Ministry of Defence clears the air force report. That has not yet happened, and air force officials now worry that the hot summer season will be over before “hot-and-high” flight tests can begin, which could push the trials back to the summer of 2010.

Switzerland, which is seeking an interim buy of 22 modern fighters (New Fighter Aircraft, NFA) to partially replace its fleet of F-5E/F Tigers, earlier this year postponed its decision by six months, to early 2010, after incoming defense minister Ueli Maurer gauged there was no national consensus on the 2.2 billion Swiss franc purchase.

The delay is likely to be far longer, however, as the pacifist group “Switzerland Without An Army” has gathered over 100,000 signatures supporting a ten-year moratorium on the purchase of combat aircraft. Under the Swiss constitution, this is enough to force a national referendum on the issue. The signatures were authenticated by local councils on June 8, but the referendum will not take place before early or mid-2011, so the program is likely to go into suspended animation until then.

Eurofighter Tranche 3 Confusion

Eurofighter’s Tranche 3 contract, which some optimistic sources hoped could be signed during the air show after an agreement in principle by the four partner nations in mid-May, will in fact be signed “later this year,” according to a spokesman for Britain's Ministry of Defence, assuming contract negotiations are satisfactory. In fact, negotiations between partner nations and industry have yet to begin, he said, and there is as yet no agreement even as to the final number of Tranche 3 aircraft each country will buy.

To further complicate matters, Air Chief Marshal Sir Glenn Torpy, Britain’s chief of the air staff, said in a June 7 interview that the Royal Air Force will operate 123 Typhoons, instead of the 232 originally planned. If confirmed, such a large cut in aircraft numbers will require a long and complex renegotiation of the Tranche 3 production contract and of national work-shares.

But Britain has already ordered 143 Typhoons -- 55 Tranche 1 and 88 Tranche 2 aircraft -- according to industry, while MoD puts the numbers at 49 Tranche 1 and 67 Tranche 2 aircraft. Given this level of clarity, quite a lot of work remains before the situation can be ironed out, and Tranche 3 contract terms can be agreed.

In any case, Britain is unlikely to buy all of the remaining 48 Eurofighter Typhoon jets it has signed up for, Reuters reported June 11 quoting a source at the Ministry of Defence.

Brazil Standing Firm

For now, Brazil’s Project F-X2 competition, which calls for the initial procurement of 36 fighters (and eventually as many as 120), appears to be proceeding nominally, unlike other countries. The Brazilian Air Force announced May 4 that it had received revised offers from the three short-listed bidders (Boeing with the F-18 E/F Super Hornet, Dassault with the Rafale and Saab with the Gripen NG), and that it is studying additional data obtained in March from the bidders. Brazilian pilots have also flown the three candidate aircraft.

Brazil has said it will pay special attention to the technology transfer and direct offset provisions of the bids, but the real deal-maker will of course be politics. The air force favors the Gripen, but Sweden wields little clout locally; the F-18 is seen as an old-technology design, but is bolstered by Brazil’s determination to stay close to the United States. France is helping Brazil design and build a nuclear-powered submarine, a submarine shipyard and a large-scale helicopter industry, in addition to having close political relations, so the balance might well tip in favor of the Rafale, which some Brazilian officials however see as technology and financial overkill.

Other combat aircraft decisions are also slipping for a variety of reasons. Greece, for example, planned to buy up to 48 modern fighters to complement its F-16s and Mirage 2000s, but it is likely to delay the purchase, as well as other weapon procurement projects, as the government tries to reduce a ballooning budget deficit by cutting back expenditure.

Japan, which needs a new fighter to replace its F-15Js, continues to press for the F-22, whose export is currently forbidden by US law. There are signs the US Air Force is lobbying for the ban to be lifted, as a way to keep the production line open while it lobbies for more F-22s. If not, Japan will revert to earlier plans for an open competition in which Eurofighter and Dassault are likely to participate. Israel and Turkey both have declared their interest in the Joint Strike Fighter, despite its cost, but are still some way from placing an order.

Middle East Orders in Abeyance

Negotiations between France and Abu Dhabi for the purchase of up to 60 Dassault Rafale fighters are proceeding slowly, sources say, and an agreement is not likely before the end of the year, if then. The sources say technical definition of the aircraft is continuing, and that Abu Dhabi has still not decided which variant of the Snecma M-88 engine, and which long-range air-to-air missile, it wants to fit to the aircraft. The issue of how Abu Dhabi will trade in its current fleet of Mirage 2000-9 fighters is also still open.

Dassault CEO Charles Edelstenne told reporters June 12 that “the context is better” for his company’s defense business. He added that “our teams are discussing [Rafale] exports with several countries, and benefit from the unfailing support of President [Nicolas Sarkozy], as recently demonstrated in the United Arab Emirates,” but cautioned against over-optimism.

Other Mid-East countries are shopping for modern fighters, but no real progress is expected to be announced at Paris on any of these sales, either. Qatar is a potential buyer of the Rafale, while Oman could become the third export buyer of the Eurofighter Typhoon (after Austria and Saudi Arabia), while the official Kuwait News Agency on June 2 quoted Kuwaiti defense minister Sheikh Jaber al-Hamad al-Sabah as saying that the “French aircraft's high quality and advanced technology demands serious consideration with regard to buying them."

Libya in early 2008 said it would buy a small batch of 12-14 Rafales, and although French President Nicolas Sarkozy said a contract would likely be signed by July 2008, nothing more has been heard about this deal.

Joint Strike Marketing

Even if little in the way of hard news is to be expected, the Joint Strike Fighter team will no doubt use the Paris air show for a full-scale marketing blitz, all the better to gloss over the program’s latest flight test delays and, more significantly, the increasingly vocal doubts being voiced by prospective buyers.

To date, Britain is the only foreign partner to have confirmed full participation in the JSF’s Operational Test and Evaluation phase, and on March 18 then British defense minister John Hutton said that three Joint Strike Fighter (JSF) test aircraft are to be purchased, marking a significant milestone in the UK's commitment to the JSF project.

And, although no British contract has been announced, the US Air Force said June 3 that its $2.1 billion order for 17 Lot III aircraft includes two for the UK (at a cost of $251.9 million).

The Dutch government, on whose behalf the US Air Force also ordered a single Lot III aircraft (costing $119.6 million), has been forced to soft-pedal its commitment to the program after Parliament in April postponed its final decision on JSF procurement until 2012, after the next elections.

Danish Defence Minister Søren Gade announced in April that a decision on which fighter jets the military will purchase to replace the current F-16s is being postponed. There is no urgency, he said, as contract signature is not expected until 2012 (and service introduction in 2020).

And, while the Norwegian parliament voted this week to authorize the government to open negotiations on the planned purchase of up to 56 F-35As, contract signature is not planned before 2014.

Australia’s defense white paper published in early May confirmed it would buy around 100 F-35s for the Royal Australian Air Force. “After an extensive Air Combat Capability Review and further detailed analysis associated with the White Paper, I am confident the Joint Strike Fighter is the right aircraft to meet Australia’s future air combat needs,” then Minister for Defence, Joel Fitzgibbon, said.

A decision on the initial JSF buy (72 aircraft to equip three operational squadrons and a training unit), is scheduled for the third quarter of 2009. However, Fitzgibbon was forced to resign in late May, and his successor, John Faulkner, has not stated his position on JSF, whose cost and delays have prompted some concern.

Pilotless Aircraft to the Fore?

Given that orders for commercial aircraft will, at best, be confirmations of previously announced deals, and that no military aircraft deals are to be expected, unmanned aerial vehicles should dominate the news and marketing dogfight over Le Bourget show grounds.

The question is whether UAV marketers are good enough to make the most of this unique opportunity, and whether reporters and visitors will be as receptive to scaled-up remote-controlled models as they are to manned aircraft.

The one obstacle they will face, however, is the tendency of governments, especially in Europe, to launch multiple, and often contradictory, UAV technology demonstrator and development programs and to underfund them with the excuse that the technology needs to mature. Despite earlier hopes, Europe’s two procurement agencies, the European Defence Agency and OCCAR, have proved unable to coordinate UAV development and production contracts, and avoid duplication. So Europe is dispersing its limited R&D funding on too wide a variety of UAVs, and most of these efforts are solely intended to allow national manufacturers to jockey for position while the military get their UAV act together.

For this to happen, military commanders must first admit that there can be a role for flying machines without a pilot’s seat, and secondly that the other services need to operate UAVs of their own. This means forgetting air forces’ favorite saying that “if God wanted the army to fly, He would have painted the sky green.”

If UAVs are to come of age in Europe, and begin to provide combat capabilities as they have so spectacularly done in US service, a lot of cleaning up among national programs and national military staffs remains to be done.


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