EADS announced they grew yearly revenue by 7.4% to 49.1 billion euros in 2011 (about $65B). Growth was driven by Airbus Commercial (their best year ever) and Eurocopter (whose revenue was 47% military). The Airbus Military business lost 6.7% from 2010 to 2.5 billion euros, with an order book of 217 aircraft down from 241 with only 5 new net orders. The A400M generated sales of 758M vs 1.04B in the previous year. Astrium (34% defense sales) and Cassidian (92% defense sales) saw smaller topline decreases.
EADS overall defense revenue dropped by 6% to 11.6B while the defense backlog dropped by 9% to 52.8B. The group has increased its Euro sales to lower its exposure to currency risk and about half its US revenue in dollars is hedged by local procurement in the same currency. EADS was sitting on about $15B worth of net cash at the end of 2011, lending credence to talks of forthcoming acquisitions.
Northrop Grumman produced a report [PDF] for the US-China Economic and
Security Review Commission on Chinese cyber capabilities:
An F-35A Lightning II made – in the words of Team Eglin Public Affairs – a “small step into the next half century of air dominance” by shortening its first training sortie at Eglin AFB to 15 minutes vs. a planned 90 minutes because of a potential fuel leak. Stuff happens, and the pilot did what he was trained to do. Updating doctrine to “maintain air dominance, 15 minutes at a time” does not sound very convincing, nor fair. But could the lofty rhetoric possibly be taken down a couple of notches?
During yesterday’s House Armed Services Committee hearing on missile defense, Deputy Assistant Secretary of Defense for Nuclear and Missile Defense Policy Brad Robert said the Administration is considering sharing classified data to allay Russia’s concerns over NATO’s plans in Europe.
The US Army intends to perform a Service Life Extension Program (SLEP) and On-Condition Cyclic Maintenance (OCCM) on its fleet of 34 Landing Craft Utility 2000 (LCU 2000) vessels. They are in service since 1990 and were originally planned for a 25-year service life, which the Army wants to extend by another 10 years. A Request For Information [MS Word] is out with the intent of eventually issuing a single contract to a prime contractor for fleet management (an RFI is not an RFP yet). The “pre decisional” schedule spans from FY14 to FY21 with vessels located in Kuwait, Japan, and on the two US coasts.
Revived tensions between the Philippines and China on the development of offshore gas and oil resources show the South China Sea is going to remain in the spotlight.
Probably less tense, but not quite at-ease: Germany on EADS moving some operations away from Germany.
China is officially announcing that its 2012 budget is increasing by 11.2% to about $106B. It is broadly agreed that this significantly understates total military spending. After about 25 years of double-digit growth China is now clearly the second biggest defense spender behind the US, with a budget that more than doubled in the last 5 years alone. There is more to it than just new kit though: some of that money is spent on improving quality of life for sailors to ease recruitment and retention, as China is facing serious demographic constraints and deep socioeconomic shifts. Associated Press | Bloomberg.
The US DoD Inspector General is reviewing the F-35’s quality assurance system, while the Air Force is looking at where to locate its training site. Meanwhile the UK is reportedlyresearching whether they should stick to F-35Cs or switch to F-35Bs.
Deputy Secretary of State William Burns told Brazilians last week, about the LAS travails:
Latest updates: Civil war ends; Hydrocarbon output back up; Post-Gadhaffi, France to refurbish Mirage F1s.
SU-35 flight, 2008
After a long hiatus in major arms purchases, and an equally long fall from its status as an ultra-modern Soviet arms client, Libya was among the countries discussed by Forecast International in its review of African defense market opportunities.
Libya’s military has traditionally been Soviet supplied, alongside some equipment from France and Brazil. The demise of the Soviet Union, the 1990s drop in oil prices, and Libya’s pariah status all combined to choke military modernization – but Libya’s new political direction, and the rise in oil prices, were beginning to change that. Widespread reports emerged in 2007 that France and Libya had signed a Memorandum of Understanding covering arms deals worth up to EUR 4.5 billion, including the first foreign sale of the Rafale fighter. Those reports weren’t followed by contract announcements – but 2009 reports and 2010 contracts showed that Russia was willing to fight to keep its old customer. Now, the question is where all of old the players fit in the new Libya, after Gadaffi’s fall:
Airbus Military got a firm order from Kazakhstan for 2 C295 transport aircraft with a Memorandum of Understanding (MOU) for 6 more. Four years ago EADS made titanium sourcing agreements with Kazakh suppliers.
In 2006 GD was contracted to repackage A-10 ammo for AC-130 Gunships. As is so often the case, there’s a story behind the story. The USA’s fearsome AC-130U “Spooky” Hercules gunships were having their old 40mm Bofors cannons and 25mm GAU-12 gatling guns removed, and replaced with ATK’s 30mm MK44 autocannons.
It didn’t go very well. In the end, accuracy and operational needs trumped standardization, and the 40mm and 25mm guns had to go back in…
US SecDef Panetta told the House Budget Committee in a hearing yesterday that he would start planning for sequestration this summer if Congress has not reached a deal by then. It is likely he will have to, and that is not even factoring in new debates over the debt ceiling.
Mark Collins is rounding up videos of the recent 2012 Ottawa Conference on Defence and Security. One thing that was not provided there or elsewhere: a definitive price tag for the F-35. It’s hard to get there when ordered quantities are in a state of flux.