Fighter Makers Reassess Options

In October 2003, Singapore short-listed the Eurofighter Typhoon, Dassault Rafale and Boeing F-15 for its next fighter purchase. While for a small number of planes--only 10 at first, with another 10 to follow--this competition has broad implications for aircraft contractors in the U.S. and Europe. It also speaks eloquently about new dynamics in the fighter market.

WORLD FIVE-YEAR FIXED-WING MILITARY AIRCRAFT FORECAST

Source: Teal Group Corp.

RENEWED HIGH-END DEMAND?

The most interesting aspect of the decision was the elimination of Lockheed Martin's F-16 from the competition. To many observers, the natural solution for Singapore was to acquire an additional batch of F-16s. The island nation already has about 45 of those, with another 20 now being delivered. Meanwhile, Singapore is an F-35 Joint Strike Fighter (JSF) Security Cooperation Partner, joining the Systems Design and Development phase of the program in February 2003, with an anticipated $50-70 million investment. Clearly, there was an easy and relatively low-cost road map between F-16 and F-35 acquisition. The decision to acquire a non-Lockheed Martin fighter (and possibly one without the U.S. Air Force stamp of approval) is a major departure from this road map.

Introducing an all-new fighter type into service is a major expense, in terms of creating a new logistics and training infrastructure. This is especially true considering that the surviving contenders are twin-engine heavyweight designs. Clearly, surrounded by potential threats and political instability, Singapore wants a high-end multirole machine, and is willing to pay for it.

Given the F-15K's 2002 victory in South Korea, there may be a noticeable trend: The market might indeed be moving upward in terms of cost and capabilities. For three decades before South Korea's 40-aircraft purchase, there were only three other export market countries that were willing to pay for aircraft in this class: Israel, Japan and Saudi Arabia. All acquired F-15s, while Saudi Arabia purchased Tornados from BAE Systems as well. In 2003, Austria became a nominal member of this club, with a tentative decision to purchase 18 Eurofighters.

With Singapore soon to become a sixth member of the elite high-end fighter club, it is entirely possible that more will join. After all, Singapore's military is widely regarded as a model of cost-effectiveness, with arms purchase decisions that are generally seen as transparent and well-considered. And while the F-35 might offer exceptional combat effectiveness, a twin-engine heavyweight might have a psychological (and therefore strategic) value of its own.

If that holds true in the future, the F-15, Eurofighter and Rafale might face improved, if not thriving, long-term outlooks. With the South Korean order, the F-15 will stay in production through 2008 at the very least. This means an impressive 35 years of F-15 family production.