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Eurofighter’s EUR 9B Multinational Tranche 3A Contract

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Italian Eurofighters
Italian Eurofighters
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In November 2008, “EADS, Customers in Showdown Over Eurofighter Tranche 3” looked at some of the issues surrounding multinational negotiations for the planned “Tranche 3” of Eurofighter Typhoon orders. In brief, the Eurofighter contract was designed to protect the fairness of each participants’ agreed manufacturing work shares, by making it very expensive to back out of committed orders. On the other hand, European defense spending continues to decline, even as operational deployments and costs increase. Hence the fractious negotiations, and also the investigation of foreign sell-offs by the member countries.

Eurofighters are very capable aircraft, but serving “Tranche 1” machines have been severely hobbled on the export market by their lack of versatility beyond air superiority missions. Britain has upgraded some of its Tranche 1 machines, and the Tranche 2 fighters that began delivery to member countries in 2008 have added precision ground attack capabilities.

By the end of Tranche 2, however, the 4-nation Eurofighter agreement still had 236 fighters left to go. In June 2009, the partners took a diplomatic way out, splitting Tranche 3 into 2 parts. At the end of July 2009, the 4 partner nations placed a EUR 9 billion Tranche 3A order….

  • Eurofighter: Design & Evolution
  • Eurofighter: Industrial Structure
  • Eurofighter: Plans and Orders
  • Eurofighter: What Next?

Eurofighter: Design & Evolution

AIR Eurofighter Spain Coastline
Eurofighter, Spain
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The Eurofighter itself has been described as the aerodynamic apotheosis of lessons learned from the the twin engine “teen series” fighters that began with the F-14 and F-15, continued with the emergence of the F/A-18 Hornet, and extends through to the most recent F/A-18 Super Hornet variants. Aerodynamically, it’s a half generation ahead of all of these examples, and planned evolutions will place the Eurofighter at or beyond parity in electronic systems and weapons. While it does not quite reach the “sensor fusion” level of American F-22 and F-35 aircraft, it has garnered praise for a very integrated set of electronic systems, coupled with a pilot-friendly cockpit design that included the first use of voice input in a fighter.

The Eurofighter is not a stealth aircraft, any more than the F/A-18 E/F Super Hornet is a stealth aircraft; nevertheless, both have received “radar shaping” designs that lower their radar signature somewhat.

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PIRATE IRST:
B-2, ICU
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Overall, the Eurofighter relies on long range detection using its CAPTOR radar and PIRATE IRST systems, coupled with an array of weapons that will include MBDA’s long range, ramjet-powered Meteor air-to-air missile. Close-in dogfights can be handled using ASRAAM, IRIS-T or AIM-9X missiles, coupled with a helmet-mounted sight and fast slew-and-point capability using its canards. Alternatively, non-British Eurofighters will have a 27mm Mauser cannon on board, considered by many observers to be the best fighter cannon on the market. For precision attack, British and German Eurofighters have been fitted with LITENING-III surveillance and targeting pods, and later versions are qualified to accommodate GPS-guided and laser-guided weapons.

The Eurofighter’s most important future upgrade is the substitution of a CAESAR AESA radar for its existing mechanically-scanned CAPTOR. Tranche 3 Eurofighters will reportedly be based on the Tranche 2 standard, with upgraded power systems and electronics that can more easily support future growth and upgrades.

Eurofighter: Industrial Structure

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Eurofighter w. Paveway IIs
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Technically, the NATO Eurofighter and Tornado Management Agency (NETMA) is the customer for the Eurofighter project. Eurofighter GmbH is the contractor, with joint ownership by all of the key industrial partners: BAE Systems, EADS, and Finmeccanica. Overall, Eurofighter GmbH cites a total of 100,000 supported jobs in 400 companies across Europe.

The Eurofighter’s 2 EJ200 turbofans deliver 20,000 pounds thrust each in reheat mode, and are manufactured by the EUROJET partnership of Avio (Italy), ITP (Spain), MTU Aero Engines (Germany) and Rolls-Royce (UK).

The Euroradar consortium supplies the ECR-90 CAPTOR radar. It is led by Finmeccanica subsidiary SELEX Sensors and Airborne Systems in Edinburgh, UK (formerly BAE Systems Avionics) and includes EADS and Spain’s Indra.

Aircraft production work shares were designed to correspond to the number of aircraft ordered under the 1998 Umbrella Contract:

  • 37.5% UK (232). BAE Systems: Front fuselage including foreplanes, canopy, dorsal spine, tail fin, inboard flaperons, rear fuselage section.
  • 30.0% Germany (180) EADS Deutschland: Main center fuselage
  • 19.5% Italy (121). Alenia Aeronautica: Left wing, outboard flaperons, rear fuselage sections
  • 13.0% Spain (87). EADS CASA: Right wing, leading edge slats

Eurofighter: Plans and Orders

FAR takeoff
Weapons array
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On July 31/09, NETMA (NATO Eurofighter and Tornado Management Agency), Eurofighter Jagdflugzeug GmbH and EUROJET Turbo GmbH signed the Tranche 3A contract, a EUR 9 billion (about $12.96 billion) order for 112 aircraft and 241 EJ200 engines (224 engines to equip 112 planes, plus 17 spares). This new contract also sets the baseline for subsequent support contracts.

BAE cites a work value of GBP 2 billion (EUR 2.35 billion), Finmeccanica cites EUR 3 billion worth of work from Tranche 3A, divided between subsidiaries in Italy (EUR 1.6 billion) and the UK (EUR 1.4 billion). Rolls Royce values its 37% share in the EUROJET order at GBP 300 million (EUR 352 million). The EJ200 includes advanced integrated Health Monitoring, and is already supported by availability-based contracting terms. Eurofighter GmbH | UK MoD | BAE Systems | EADS | Finmeccanica | Rolls Royce | BBC | Deutsche Welle | Financial Times | Hamburg Local | Reuters says last buy for Britain | London Telegraph | Times Online | UPI Asia.

The table below summarizes the Eurofighter’s evolving production plans, from the original 1985 plan to the 1998 agreement, and then planned and actual orders for each production tranche.


1985 1998 Tr 1 Tr 2 Plan 3 Tr 3A Tr 3B Actual TL
Britain 250 232 53 67 88 40 0 160
Germany 250 180 33 79 68 31 37 ? 143
Italy 165 121 28 47 46 21 25 ? 96
Spain 100 87 19 34 34 20 14 ? 73
Austria

15



15
Saudi


72


72
TL 765 620 148 299 236 112 76 ? 559

Note that 24 of Britain’s Tranche 2 aircraft have been diverted to Saudi Arabia, in order to satisfy Saudi demands for early delivery. In response, Britain ordered 24 more Tranche 3 aircraft as replacements. In practice, this means that Britain has ordered only 16 of its originally planned 88 Tranche 3 Eurofighters – and high-level statements indicate that Tranche 3A agreement absolves Britain of the need to place any further Eurofighter orders. Other reports explain the gap by claiming that the other 48 British Tranche 3 aircraft will go to Saudi Arabia, meaning that all of Saudi Arabia’s 72 planes will have been siphoned off from British orders. This has not been confirmed.

Eurofighter: What Next?

FAR takeoff
New dawn, or twilight?
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What is clear is that UK Air Chief Marshal Sir Glenn Torpy has said that he expects the RAF to operate on the basis of a Typhoon fleet of 120 aircraft. By the time the last jets of the third tranche come into service, between 2015 and 2020, the first batch of Tranche 1 Typhoons would be approaching the end of their life.

The status of other countries’ Tranche 3B orders is presently very unclear, and it is possible that Tranche 3A will be the last production order from the original member countries. A recent Der Spiegel article illustrates some of the the issues in Germany, for instance:

“The German air force didn’t get the first jets until July 2006. It now has 38 Eurofighters. But 14 of them have been sent back for repairs. Some of them still suffer instrument failure during flights. Of the six single-seat aircraft at the Neuburg air base only four are fit for service on average. That’s just enough to provide day and night cover for Germany’s airspace. The defense ministry recently admitted to budget committee members that the approved sum of [EUR] 14.7 billion would only be enough to pay for 143 Eurofighters. Parliament would have to approve an additional [EUR] 3 billion if the air force was to get the planned 180 aircraft…”

At present, the Eurofighter is still alive in export competitions to Switzerland and India, but it is a dark horse in both competitions. It is reportedly a strong contender for Japan’s next fighter buy. Japan wants the F-22, but if approval is not granted, the competition would be between Boeing’s F-15SE stealth-enhanced “Silent Eagle,” and the Eurofighter. The other prospects on its radar screen include Oman, which may end up buying some British aircraft; and Greece, which canceled an order for 30-60 Eurofghters in 2005, and bought F-16s instead. Greece still has plans for an additional next-generation fighter buy, to counter Turkey’s planned purchase of 100 F-35As.

Other export opportunities may arise. The Tranche 3A release from Eurofighter cites active campaigns in Switzerland, India, Japan, Romania, Greece, and Turkey, while “exploring possible opportunities” in South Korea, Bulgaria, Croatia, et. al. An August 30/09 article in the Financial Mail, meanwhile, reports Eurofighter GmbH targets of 300 Eurofighter Typhoon sales to 10 countries over the next decade.

With that said, the Eurofighter’s cost of $100-140 million each could make for tough sledding against F-35s whose production quantities are likely to create prices in the $80-100 million range, and F/A-18 Super Hornets that can be sold for $70-90 million. Selling 300 aircraft will be challenging – and with existing operators interested in selling some of their aircraft, even an export win or 2 may not change the Eurofighter’s overall production numbers.

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