Barrett secures Canadian DND contract

On the same subject

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  December 22, 2020 | Local, Aerospace

  Ottawa eyeing second-hand market to replace VIP and cargo fleet

  Government considering a deal with commercial airlines seeking financial assistance, sources say Daniel Leblanc · CBC News · Posted: Dec 22, 2020 4:00 AM ET | Last Updated: 9 hours ago The federal government is exploring the possibility of replacing its aging fleet of transportation planes as part of a planned bailout of the country's battered airline industry, federal sources said. While plans to replace the Canadian Armed Forces' five CC-150 Polaris aircraft have been in the works for years, government officials said they have started to look at whether any deal can be found among commercial airlines that are currently looking for financial relief from Ottawa. The airline industry has been one of the hardest hit by the COVID-19 pandemic and is facing a liquidity crisis, having been forced to cut back on a number of regular routes amid a sharp decline in demand. Sources, whom CBC News agreed not to identify in order to discuss confidential elements of the procurement process and talks with the airline industry, said Air Canada is seen as a potential supplier for the fleet, which is used to transport cargo, troops and dignitaries such as the prime minister. Still, the sources said discussions are preliminary. Last week, all potential suppliers were invited to signify their interest in the contract as part of an "invitation to qualify" published on a federal website. "It is not a new project," a defence official said. "The reason why [the Canadian Armed Forces] are looking at this now is really because of the fact there have been significant changes in the global aircraft market this year. They are looking at options to see what suppliers might have available, because order books are looking different than they were a year ago." Another official confirmed the government sees a possible window to inject liquidity into the airline industry at the same time as it seeks to replace its fleet of gas guzzling transport aircraft. "When the government decided a few weeks ago to help the airline sector, there was a situation where it became possible to address two issues at once, namely helping the airline industry at the same time as replacing an aging and polluting fleet," the official said. Proceed with caution Still, aviation expert John Gradek cautioned that a company like Air Canada would much prefer to hold on to its most recent aircraft and sell the older ones to the government. "Would you want to trade old for old?" he asked. Gradek added there are thousands of aircraft parked around the world, and manufacturers, facing a decreased demand, might be willing to offer a deal to the Canadian government. He pointed to Air Transat as a potential Canadian-based supplier facing financial difficulties and surplus capacity. "The airline market is soft; it's a buyer's market," he said. Air Canada declined to comment on the matter. New aircraft needed The five Polaris aircraft were built by Airbus and sold to Wardair in the late 1980s, before being resold to the Canadian Armed Forces in the early 1990s. They are used to transport cargo and troops on military and humanitarian missions, as well as VIPs, including the prime minister, the governor general and foreign dignitaries. Two of them are equipped for air-to-air refuelling and can each help four CF-18s to cross the Atlantic. One of the two Polaris CC-150s that can be used for VIP transport suffered serious damage last year when a motor struck a tow tractor in a hangar and its nose crashed into a wall. The repairs to the aircraft are ongoing. The aircraft designed for VIP use are far from luxurious and fall well below the standard of most aircraft used to transport G7 leaders, both in terms of comfort and communications equipment. THE BIG SPEND As passengers pushed for refunds, Air Canada got more than $400 million for wage subsidy The invitation for suppliers to qualify to provide strategic tanker transport aircraft was published on Dec. 17. The Canadian Armed Forces are once again looking to acquire five aircraft for this new fleet, which will be expected to offer air-to-air refuelling capabilities for the new fleet of fighter jets. Gradek said that once the Polaris CC-150 are replaced, they will likely be headed for the scrapyard. "There is no market for these airplanes," he said. https://www.cbc.ca/news/politics/ottawa-second-hand-market-planes-1.5850140

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  August 9, 2023 | Local, Naval

  Government of Canada announces investment in shipbuilding infrastructure for the Canadian Surface Combatant

  Through the National Shipbuilding Strategy (NSS), the Government of Canada is revitalizing the Royal Canadian Navy’s (RCN) surface fleet of ships to ensure that members have the equipment needed to do their jobs and protect Canadians.

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  September 25, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security

  Opinion: After Major Mergers, What’s Next For Defense Market?

  By Byron Callan This year has shaped up as a record one in terms of the volume of major defense transactions so far announced. Considering deals of $100 million or more in announced value where defense is the primary factor, the 2019 total exceeds $61 billion. Of course, the largest single example is the Raytheon-United Technologies Corp. (UTC) merger. There are reasons to expect heightened activity in 2019 and 2020. Some reasons are known and others can be assessed, but one that does not appear to be affecting market expectations is the Raytheon-UTC deal. Since it was announced on June 9, the companies' share prices have declined from the June 7, close: Raytheon's by 4% and UTC's by 5.7%. The S&P 500 has been flat. However, share prices of peers have risen—General Dynamics is up 5.4%, L3Harris Technologies has increased 6.2%, Lockheed Martin and Leidos have climbed 7% and Northrop Grumman is up 14.4%. These price moves may be attributable to safe-haven seeking by investors who were spooked by global economic concerns and trade wars, but the budget deal reached by Congress also was a factor, as were July earnings reports. The price reactions, however, do not suggest that investors are particularly concerned about the impact of the competitive strength of the Raytheon-UTC union and its ability to take market share away from peers. Nor do they suggest that the deal will trigger a rush by defense-focused companies to merge with commercial ones. Were the latter to be the case, the price reactions may have been similar to Raytheon and United Technologies'. There have been other known developments that raise the question of what is next. Kaman Corp. sold its industrial distribution business for $700 million and will seek to redeploy that capital into engineering products businesses, some of which could involve defense. L3Harris signaled in June that it is undertaking a portfolio cleanup after the completion of the merger, and so there should be divestitures from that company. Textron announced in August that it was reviewing “strategic alternatives” for Kautex, which makes blow-molded fuel systems and other parts primarily for the automotive industry. Presuming that it leads to a sale of that business, Textron will have cash, some of which might be spent on defense. There are general factors as well that could spawn sector merger and acquisition activity in 2019-20. One of the biggest is the potential uncertainty surrounding the outcome of the 2020 U.S. elections. Buyers and sellers have to weigh a number of variables. If the current administration is reelected and control of Congress remains split at least through 2022, then it may be safe to assume that the status quo will continue. One variable within the status quo is how contractor portfolios could be affected by the ongoing efforts of the Pentagon to better align its programs with the National Defense Strategy. Like the Army's “night court” process, this may yet spawn a reassessment of specific programs and their future growth outlook. But if the status quo does not prevail, defense contractors could face a wall of uncertainties in 2020 and may choose to act before rather than after these uncertainties are clarified. First, they will have to assess which Democratic candidate could win the primary cycle and then the nomination. If it is a centrist candidate, the Defense Department spending outlook might not change all that much, although exports to some countries might be curtailed and there could be changes in some Pentagon budget priorities, particularly for nuclear forces modernization. A more progressive-leaning candidate might raise the risk of a more subdued defense budget outlook, particularly if fiscal resources are instead directed toward health care, infrastructure, student debt and other nondefense priorities. Second, there will have to be an assessment of whether a Democratic win of the White House could also flip control of the Senate to the Democrats. If there is a Democrat in the White House but a Republican majority in the Senate, the Senate could still check budgets or policies that may be detrimental to defense. It might also block efforts to roll back changes to tax laws made in 2017. A third variable to be assessed is the attitude of a new administration toward defense mergers and acquisitions, contractor financing and risk. A more progressive administration could look very differently at the structure and financial status of contractors. All these variables will lead to different analyses of current and future value in defense. Is it a good time to hunker down and wait to see what happens or to act in the time that remains in 2019-20 before investors and creditors draw their own conclusions? These uncertainties alone suggest that some will act in anticipation of a change rather than just wait and see. https://aviationweek.com/defense/opinion-after-major-mergers-what-s-next-defense-market