Here is a good reason you might be seeing Russian Jets tearing up our skies

[SIZE=4]10/28/2013[/SIZE]
U.S. Fighter Aircraft Pricing Themselves Out of the Export Market
By Sandra I. Erwin http://www.nationaldefensemagazine.org/blog/Lists/Photos/!MAIL_ICON_size.jpg

http://www.nationaldefensemagazine.org/blog/Lists/Photos/f16-chart-10282013.jpg

At a time when U.S. arms manufacturers are turning to overseas markets to help make up for declining sales to Pentagon, analysts warn that the high prices of American fighter jets could place U.S. firms at a competitive disadvantage.

The arrival of the F-35 Joint Strike Fighter gives manufacturer Lockheed Martin Corp. an opportunity to sell the world’s most technologically advanced aircraft. But its price tag, in excess of $100 million per airplane, will make it unattainable for most non-U.S. buyers, according to new analysis by The Teal Group, a market research firm. Other perennial contenders in international competitions, Boeing’s F/A-18E/F Super Hornet and F-15 Eagle, also are becoming out of reach for many nations.

“We’ve jacked up the price of fighters,” says Teal Group Vice President Richard Aboulafia. “The export market’s reaction? ‘No, thank you,’” he tells industry executives at a meeting hosted by the Air Force Association, in Arlington, Va.

Although the average unit price of fighters sold internationally today is $65 million — about the cost of a Super hornet — the bulk of the export market increasingly wants F-16 prices, which is about one-third less, says Aboulafia.

Of 52 countries that buy fighters worldwide, 30 are in the $35 million to $50 million price range, he says.

American firms face a “ real issue” trying to sell higher end machines, Aboulafia says. There are currently just five F-15 users after 40 years of trying to sell it internationally, and one non-U.S. user of the Super Hornet after 15 years of competitions, he says. “That’s not good.”

As the manufacturer of the F-16, Lockheed effectively owns the keys to the kingdom of export fighters, says Aboulafia. The problem is that the company is focusing its marketing efforts on the F-35 as it courts international buyers, and only a handful of countries can afford it.

“It’s very telling when you go to [Lockheed’s plant in] Fort Worth, Texas, that the F-16 line is treated like the red-headed stepchild,” he says. “I don’t think it’s necessarily in their interest to keep it going. … But it is concerning because, in terms of the export market, the F-16 line is extremely relevant and necessary.”

The majority of buyers over the coming decades will shop for fighters in the price range of the F-16 or the Mirage 2000, made by France’s Dassault Aviation, Aboulafia says. “And that is the market that we’re in danger of abandoning.”

It is estimated that only seven countries could afford the Super Hornet and another seven might be candidates for the F-35, including Singapore, Japan, Israel and South Korea.

That is a very small pool of buyers, says Aboulafia. For most countries, “a buck and a quarter isn’t going to cut it,” he says, referring to the current price of the F-35. “If prices don’t go down, the U.S. risks losing a considerable chunk of the world export fighter market which isn’t only important from an economic standpoint, but also for strategic relations and keeping allies happy.”

The United States already riled key allies when the Air Force decided to end production of Lockheed’s F-22 air-superiority fighter at 187 airplanes, before it could be sold internationally. “It is bad enough we killed the F-22 before satisfying Japan and Australia," Aboulafia says. The F-35 is now the only high-end fighter in a position to compete for a small number of wealthy nations’ business, he adds. “Having a one-size-fits-all $100 million fighter is just as dangerous in a lot of ways. The market might not grow to pay that price.”

A shrinking pool of buyers is simply the result of global economic trends.

A group of countries that used to buy lower end fighters bifurcated into haves and have nots. The haves, such as South Korea, moved up into the F-15 or F-35 market. The majority of the have-not countries — including Kenya, Bolivia and Argentina — no longer buy anything except used planes, says Aboulafia. “The market either migrated up or down.”

This puts the United States in a tough spot trying to compete in the developing world as U.S. manufacturers struggle to keep their production lines going. “The last F-15 gets delivered in 2018 or 2019 to Saudi Arabia. … The last F/A-18 E/F exports deliver in 2015 or 2016 unless we win Brazil or Kuwait,” says Aboulafia. Current orders for F-16s would extend production until 2017. “This is worrying.”

The biggest pot of future fighter business, which he calls the “undetermined” sector of the market, is in developing countries that demand lower prices and more technology transfer. “If you want to survive in the fighter market and you’re not Lockheed or [Russian manufacturer] Sukhoi, this is what you have to access before the next decade.”

The United States blew a major opportunity in India last year, where Lockheed and Boeing lost to Dassault’s Rafale, he says. “It’s pretty clear we did a bad job of promoting U.S. products and make sure that everybody in Treasury, State and Defense were on the same page in terms of technology transfer and offset issues.”

U.S. firms should worry about Sukhoi’s T-50 fighter, he says. “Russia fell from grace, but they’ve done a good job reinventing their industries,” Aboulafia says. “The T-50 looks real to me, although it’s going to happen slower than expected.”

There are only four remaining fighter competitions — in Brazil, Malaysia, Kuwait and Qatar — where the F-35 is not participating and the stakes are huge for the F/A-18, F-15 and F-16, he says. For U.S. industry, winning these deals could be a matter of survival, he says. “If you want more than one fighter line, you have to start accessing the undetermined market. … That is why it was such a disaster when the F/A-18 lost India.”

That Lockheed has kept the F-16 line going on exports alone is "extraordinary,” he says. Nearly 4,600 have been sold since 1970. “The F/A-18 is not going to have this future if the U.S. Navy stops buying them. It doesn’t enjoy a decade thriving on exports.” The Super Hornet is “good value for money, but it’s not in a sweet spot. It’s not really high end, and not really ‘great’ value like the F-16 is.”

Lockheed Martin spokesman Ken Ross says the company does not see the F-35 limiting its opportunities in the international market. The F-35 and the F-16 are “complementary” products, he says. The F-35 is for those countries that are looking ahead to the “next level of capability,” Ross says. “We provide options.”

Chart Credit: Lockheed Martin
Posted at 12:53 PM by Sandra Erwin

Sukhoi/MiG/Gripen here we come, tupewe kiti huko…

Naweza penda Gripen C/D ama Mig-35

Mig-35 noma; kwanza venye ni rugged. Am also a fan of Rafale - kama inawezekana…

Rafale bei ndio noma plus upus ya hao tu ndio wanaweza kukuuzia arms na spares

mimi nataka kununua OSPREY .

Ngombe ya wenger labda ujaribu hii, bei najua utafika…
https://upload.wikimedia.org/wikipedia/commons/0/01/2010-kabini-osprey.jpg

HIO UZIA MCHAWI JUMAKUMBAF

2 Likes

hakuna ndege napenda kama B2 spirit na Mig na huyo hapo juu is a raptor (Did u know the Peregrine Falcon is the fastest moving thing on earth, can move at around 250mph

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What i’ve posted is a Sea hawk better known as Osprey

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Mig ni mingi. Specify ni gani

Hakuna hata warship hata moja jamani!!