F-16 Fighting Falcon News

F-16 takes second shot at Czech market

October 11, 2003 (by habu2) - In a bid to win the Czech Republic's new competition for upgraded fighters, the Defense Department last week notified Congress of its offer to sell the new NATO country 12 older model F-16 aircraft in a deal that could be worth as much as $650 million.

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The official U.S. offer is a significant turnaround from 2001, when the United States, along with several European countries, decided not to bid in the Czech competition, citing frustration over requirements to submit Czech-language offers and to fix the price in Czech currency. Left with only one offer, the Czech Republic decided in 2001 to acquire 24 JAS-39 Gripen fighters offered by Sweden's Saab and Britain's BAE SYSTEMS.

But that purchase was cancelled last year after the Czech Parliament decided that it could not afford the large purchase. Then, earlier this year, the Czech government approved a new plan to proceed with the lease of up to 14 fighter aircraft for an initial period of five years starting in 2005, followed by a formal competition to select a long-term fighter solution for after 2009. Bids on the Czech competition are due at the end of the month.

Unlike the more ambitious plans the Czechs had several years ago, the current ompetition is designed as a stop-gap solution to replace the country's aging MiG-21 fighters.

The F-16s being offered are designed for policing missions only and are not to be used for coalition operations abroad. The aircraft will not have air-to-ground capability and will be used primarily to provide an interim capability, up to about 10 years.

The U.S. offer is for 12 F-16A block 15 aircraft and two F-16B block 10 Operational Capabilities Upgrade (OCU) aircraft. Another two F-16A Block 10 OCU aircraft would be made available for spare parts. The Pentagon also is offering 16 new Pratt and Whitney F-100-PW-220 engines, including 2 spare engines, and 35 LAU-129 launchers. The Czech Republic also will have the option to buy 20 Raytheon AIM-120C Advanced Medium Range Air-to-Air Missiles (AMRAAM) and 4,000 rounds of 20mm cannon ammunition. Lockheed Martin, Pratt and Whitney, Raytheon and United Fastners will be the main contractors for the work should the Czech Republic go with the U.S. offer.

DSCA, the Pentagon arm in charge of foreign military sales, is betting on its flexible financing plan to help close the deal. Interest payments are deferred for the first five years, and the Czechs will have 12 years to repay the principal and interest, set at 5 percent. In late September, the House provided authority for the United States to offer the $550 million Foreign Military Financing (FMF) loan to the Czech Republic so that its military could buy the used aircraft. While the Czech tender asks for a lease, the U.S. offer is for a purchase, would only have a small price difference compared with a lease plan.

The United States is offering another innovative option to the Czechs, according to Walters. Because the Czech Republic is likely have competing offers for used F-16s from Belgium and the Netherlands, the United States will allow the Czechs to use the FMF financing to help offset the costs of American-provided support for those F-16s. The same deal would be offered for F-18As that Canada expects to bid.

While the United States has not yet given approval for those countries to sell the U.S.-origin aircraft to the Czech Republic, the transfers should not be a problem. It is unlikely that the U.S. would object to close friends and allies--particularly NATO countries flying our current aircraft--offering those as third party transfer to another NATO ally.

If the Czechs choose the F-16s, the aircraft would probably be retired by 2015, and the U.S. hopes that the long-term solution would be for the Lockheed Martin F-35 Joint Strike Fighter (JSF). The F-16 will probably end production in 2010, Walters predicted, with the foreign sales of the JSF picking up in 2012.