Players in the world's fighter market may come to regard 2002 as the year that a major power shift occurred. If current trends continue, Europe gradually will lose its position, and possibly much of its fighter industrial base.

The reasons for this power shift are many. For one, the U.S. market has grown, while the European market has remained largely stagnant. Also, the export-oriented F-35 Joint Strike Fighter project now looks relatively safe, despite remaining uncertainties. And South Korea's F-15 decision quashed European hopes for the last major export contract that was not affected by the F-35.

U.S. PROSPECTS SOLIDIFY

The U.S. fighter industry's future prospects have been greatly enhanced by the war against terror, and the resulting increase in defense spending. Before the increase, the U.S. tactical aircraft budget was frequently likened to an imminent train wreck. While this problem hasn't completely gone away, it is now looking much more manageable. The change in political climate also has made it very difficult for U.S. politicians to make a name for themselves by threatening funding for key aircraft programs.

This increase in defense spending has been accompanied by a major divergence in foreign policy between the U.S. and Europe. Europe seems content with a relatively passive role in global affairs, with only Britain showing interest and, perhaps, France showing signs of interest. From an arms importer's standpoint, acquisition of weapons from an "active" manufacturer is generally preferable. The U.S. services are using, improving, upgrading and supporting their equipment, and have forces roaming the globe to provide backup. They're inventing new ways to channel data, new doctrine to improve performance, and stockpiling spares all over the place. The European services, aside from Britain and France, are buying aircraft and, for the most part, parking them in indigenous squadrons, defending their nominal status as military entities.