Forum: Program and politics

Danish Military To Meet Lockheed, Boeing Over Fighter Replacement Nov. 12, 2012 By AARON MEHTA

http://www.defensenews.com/article/2012 ... eplacement

"Danish military officials will be visiting Washington this week in a major step toward restarting competition for their fighter replacement program. The delegation will meet with representatives from Lockheed Martin’s F-35 Joint Strike Fighter (JSF) program and Boeing’s F/A-18 Super Hornet.

Although Denmark is a partner in the JSF program, officials insist all options are on the table.

“No decision has been made,” said Lt. Col. Per Lyse Rasmussen, assistant defense attaché at the Danish Embassy. “We want an open and fair competition.”

Denmark announced its intention to replace its fleet of F-16s in 2005. But the program was frozen in 2010 amid economic worries and a decision that the existing jets would last longer than expected.

The replacement program initially involved purchasing 48 next-generation fighters, but that number has been reduced to about 30.

In addition to the conventional takeoff version of the JSF and the Super Hornet, Denmark is considering the Saab Gripen. The Eurofighter Typhoon pulled out of the initial competition but has since signaled it wants to be considered when the program is restarted.

Rasmussen expects Denmark to pick the jet that can provide the best package of strategic capabilities and industrial impact for the country’s defense industry. He also expects negotiators to drive a hard bargain over what will likely be the largest Danish defense expenditure in the next 30 to 40 years.

“We are difficult to deal with when negotiating but are a good and loyal costumer once a decision has been made,” Rasmussen said...."

More at the jump.

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Just trying to squeeze a better price and/or offsets out of LM.

sferrin wrote:

Just trying to squeeze a better price and/or offsets out of LM.

You can't blame them, seeing how Japan and Israel seem to be getting some considerate offsets while Denmark -as a level 3 partner- has voiced quite some criticism on that part.

Regardless of Denmark's ultimate replacement decision, I would suspect 'Terma' to remain a worthy supplier to the F-35 Program as long as the F-35 Program remains on track.

If Denmark were to select the F-35 though, one could question how many they would ultimately be able to afford in actuality (when comparing to current cost estimates for expected future FRP buys)? If waiting further down the road to procure F-35 too, that might also require additional and unplanned upgrades (and unexpected costs to be factored in) to Keep the existing F-16 fleet as a credible stopgap during the extended span?

However, it would be my opinion that purely geographically-speaking in a military-Defence context, Denmark is like a giant Air craft carrier, being a relatively small sized land mass jutting out into water. In such a case, Denmark could be seen as a viable candidate for operating a Carrier-op-specialized design, being able to sufficiently employ similar, possibly 'good enough' protective requirements.

If so, then on a different theme I'd be curious if Boeing would ever consider offering a 'Lease' option for Super Hornet acquisition, or if a potential customer would ever require such a 'medium-term' Leased option? To me at least, an properly priced '4.5 gen Lease' would seem at this unique stage in various Fighter-recap conundrums being faced by Air Forces to be a viable option as a 'medium term' recapitalization plan.

That option could potentially allow flexibility by the operator to decide down the road (at the end of the Lease term) so that incrementally upgraded and reliable 4.5+ gens with plenty of flying hours in the bank could be effectively determined as the sufficiently 'good enough' operated platform to be continued. But if not, and more modern aircraft types are indeed required as part of a future mix, then after the Lease-term perhaps a wider and more prudent, more cost-effective 'next-gen' tactical replacement mix will be available on the market providing a more strategic and better longer-term solution.

Perhaps though, integrated Euro-Pooling will become the more dominant theme soon and that requirement alone could hence be determined as well to be best accommodated by a commonly-operated/jointly-supported, late model Euro Typhoon platform, eg.

Regardless, this will be rather interesting to watch, as will any other potential 'competition restarts' to come too. Respects to RDAF-

Again with the "lease"?

Every time you bring that up, you fail to address the the key economic question:

In order for a "lease" to be economically viable for the lessor, there has to be a viable and reliable sale option at the end of lease.

That model works in the automobile market due to a large and ever growing 2nd hand car market. That does not exist in the fighter market.

Spud, once again, there could indeed very well be a viable economic sale option (or lease renewal) found at the end of such a hypothetical F-18E+ Lease term, so not to worry so much. RAAF for one has leased Super Hornets and have a customer for the returned jets at end of term. And those aren't even equipped with the new computer, let alone have the next-gen wide-screen display, nor plumbed for any possible future CFT! Components which could be included in say, an FY15 F-18E procurement.

I'm sorry but I feel you're thinking (biased) too much inside the box on this one. It's the 21st century. Manned 'next-gen' Fighters are costing an astronomical sum to procure and support and will likely only continue to increase in cost (lest there be a lighter-weight, future fighter design eg, designed with economy in mind). Creative acquisition solutions and recapitalization strategies will likely become more apparent and increasingly necessary in the near-term, especially given the reality of decreased buying power budget environments, going forward.

So absolutely, after an hypothetical 12-15 yr Lease term would expire for an modern, upgrade-friendly Super Hornet eg, there will highly likely be either the demand for extending the lease or purchase by operator, or acquisition by USN, or acquisition by FMS as part of their required cost-effective mix. Simply put, a 15 year old affordable platform, with certain unique capabilities such as that found in an F-18E+ carrier-op-capable strike-fighter, will very likely find a viable end-of-Lease option. Respects~

The RAAF have BOUGHT their SUPER HORNETS outright along with bits and pieces for an initial 6 Billion Buckeroonies [US Dollaroonies but exchange rate much more favourable these days]. Some will be converted to Growlers with all that equipment being bought and upgraded outright. Yes it may be likely that some or all of the RAAF Supers will be sold back to USN.
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Australia Buying 24 Super Hornets As Interim Gap-Fillers Aug 24, 2012

http://www.defenseindustrydaily.com/aus ... jsf-02898/

"...The accelerated retirement of Australia’s 22 long-range F-111s in 2010 sharpened the timing debate, by creating a serious gap between the F-111’s retirement and the F-35’s likely arrival.

In December 2006, therefore, The Australian reported that Defence Minister Brendan Nelson was discussing an A$ 3 billion (about $2.36 billion) purchase of 24 F/A-18F Block II Super Hornet aircraft to fill the fighter gap. The move came as “a surprise to senior defence officials on Russell Hill”; but quickly became an official purchase as requests and contracts were hurriedly submitted. Australia’s new Labor government’s later decided to keep the Super Hornet purchase, rather than pay cancellation fees, but added an interesting option to convert 12 into electronic warfare planes. Ministerial statements place the program’s final figure at A$ 6.6 – 7.0 billion, which includes basing, training, and other ancillary costs...."

Forum: Program and politics

Danish Military To Meet LM, Boeing Over Fighter Replacement