Dassault Discusses Global Fighter Market to 2015
Despite a failure to win any export orders thus far, Dassault Aviation Executive Chairman Charles Edelstenne foresees exporting about 300 of its 4th generation Rafale jet fighters in the next 7-8 years as air forces worldwide modernize their fleets.
His estimate is based on the projection that of the 20,000 fighter aircraft worldwide, between 8,000 and 10,000 would need to be taken out of service in that period. Replacements are assumed to be on a 1 new : 2 old basis, and he estimates that half of that market would be open to non-U.S. aircraft. These are typically buyers who actively do not buy American, or want a second source of supply. Thus, some 2,000 to 2,500 fighters likely would be needed, and assuming Saint-Cloud-based Dassault maintains its 13-15% share of the world fighter market, one gets about 300 aircraft.
In fairness, there are a number of assumptions built into that prediction, and a few factors not included in this linear extrapolation analysis.
- The F-35 Joint Strike fighter will be available in 2015 to top-tier air forces, creating a new level of competition. MBDA is already making adjustments for this eventuality, by rethinking its strategy for the Meteor BVRAAM (Beyond Visual Range Air-Air Missile).
- Sukhoi’s SU-27/35 family, which continues to grow in popularity, offers a strong non-American option.
- EADS’ Eurofighter offers a competing platform from a European supplier, as does Saab’s JAS-39 Gripen. These entities have not previously been major players in the same segments of the export market.
- Constrained budgets may make Dassault’s Mirage 2000 a more likely choice in many Third World air forces. Not to mention more advanced air forces like India. But a 2006 decision to stop Mirage 2000 production will remove this option.
As the Teal Group noted in February 2002:
“In the past two decades, there have been 26 export customers for fighters in the $25-million-$35-million range (F-16, Mirage 2000, Gripen, Harrier). There have been nine export customers for fighters in the $36-million-$45-million range (F/A-18 and, notionally, Sukhoi’s Su-27/30). Finally, there have been a mere three export customers for fighters in the $45-million-and-above range (F-15, Tornado).
Similarly, most of the current new, pricey twinjet fighters have been on the market for the past decade. A total of zero export market orders for the Eurofighter, F/A-18E/F, and Rafale have been received. Yet also over the last 10 years, the export market has absorbed over 400 $25-million F-16s, more than 130 $35-million Mirage 2000s, plus several dozen $30-million Gripens and AV-8B+s. In short, customers are still signing contracts for export-priced models, but have balked at going for the big, expensive planes.”
Given all these caveats, simple straight-line extrapolations based on past market share would appear to be problematic.
These demand projections may give heart to Saab, however, who is experiencing layoffs due to slow JAS-39 sales thus far. The aircraft’s affordability and low total cost of ownership may prove to be greater long-term assets than they have shown to date.
Meanwhile, Lockheed’s F-16 fighter jet continues to enjoy strong sales worldwide, with firm production through 2008 and a strong likelihood of new orders that will extend the line for several more years. There are current backorders for 191 F-16 aircraft, and Lockheed also believes there is a strong possibility that it will gain 100-200 further orders during the next few years. Even larger numbers are possible, in the event that India selects the F-16 as part of its lightweight fighter competition.
Recent F-16 program milestones have included a rollout ceremony for the first aircraft for Chile at the Lockheed Martin plant in Fort Worth, Texas; the arrival of the first group of 10 “Block 60” F-16 E/F aircraft in the United Arab Emirates; and Turkey’s agreement for a major capabilities upgrade for its fleet of F-16s. Aircraft now being produced for Chile, Oman, Poland and Israel are in the Advanced Block 50/52 F-16C/D configuration, though the Israelis remove many of the American electronics and substitute their own advanced products and weapons thereafter to create the F-16I Soufa. The UAE is the launch customer for the Block 60 version, which has a new type designation – F-16E/F.
With all of these aircraft in the mix, plus a potential “second-hand” market as top-tier air forces upgrade and look for offsets, the only certainty is that competition for those 2,000 to 2,500 fighter orders is likely to be extremely fierce.
- Aviation Week & Space Technology (Feb 24/03) – F-35’s Potential Looms Over Global Fighter Market