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Boeing to Finmeccanica Await Middle East Combat Plane Selections

A Mirage 2000 Jet Fighter Aircraft
More than $10 billion in combat plane contracts are up for grabs in a market where jets can retail from $60 million per plane to more than $100 million. Photographer: Jason Alden/Bloomberg

Nov. 20 (Bloomberg) -- Boeing Co., the world’s largest aircraft maker, and European rivals are awaiting a slew of combat-plane purchases from prospective Middle East buyers as they aim to secure the future of jet production lines.

Kuwait may decide next year about a purchase of as many as 40 jets, Giuseppe Giordo, head of Finmeccanica SpA’s Alenia Aermacchi unit that leads the Typhoon campaign for the Eurofighter joint venture, said in an interview at the Dubai Air Show. The partnership also includes European Aeronautic, Defence & Space Co. and BAE Systems Plc.

Western defense companies have stepped up sales efforts in Asia and particularly the Middle East to secure combat-jet orders as demand fades in their home markets amid reduced defense spending. Overseas sales can be crucial to assure production lines don’t shut down as early as this decade, including for Boeing’s F/A-18 Super Hornet.

“There are a number of campaigns around the world,” Boeing Chief Executive Officer Jim McNerney said at the show. “There is a worst-case scenario where the line will shut down in three to four years but I don’t think that will come to pass.”

Production Plans

The U.S. Navy is reviewing long-term F/A-18 spending plans and whether to continue buying the jet, with last deliveries to the Pentagon currently planned in 2016, said Navy Captain Frank Morley, the service’s program manager. Decisions will be taken next year on whether to end purchases.

Kuwait has evaluated the F/A-18, he said, while talks with the United Arab Emirates, which is considering the purchase of as many as 60 jets, have quieted down, with the country’s negotiations currently focused on European offerings.

BAE Systems leads the Typhoon push for the consortium in the Middle East, and U.K. Prime Minister David Cameron visited the show as part of the government’s backing for exports.

“I continue to support Typhoon around the world, which is doing extremely well and is clearly in the running here as well,” Cameron said on his visit.

More than $10 billion in combat plane contracts are up for grabs in a market where jets can retail from $60 million per plane to more than $100 million. Prices are typically not disclosed and are highly contingent on weapons and other systems on the product.

Marketing Push

To aid its marketing push, the Eurofighter consortium announced today it would start integrating long-range cruise missiles on the Typhoon to attract Middle East customers interested in such capabilities. The U.S. has been more reluctant to allow the sale of such weapons in the region.

The European team also aims to sign a contract for a more modern radar type next year that is in high demand in export markets, Laurie Hilditch, the consortium’s head of future capabilities, said today at the event.

Qatar also is among the buying countries and may purchase an initial batch of 36 combat planes and an equal number later. Paul Oliver, Boeing’s regional vice president for defense said both the F-15 and F/A-18E/F could be candidates. Eurofighter and the Dassault Aviation SA Rafale combat jet, already in the mix in the U.A.E., are also under consideration in the neighboring contest.

The interest in advanced combat jets is also triggering interest in purchases of new training aircraft to prepare pilots to fly the modern planes, with Kuwait a possible buyer, Giordo said. Oman, which last year committed to buying Typhoon combat jets through BAE Systems, also acquired the London-based company’s Hawk trainer plane at the same time.

To contact the reporter on this story: Robert Wall in Dubai at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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