March 24, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
WASHINGTON: While the cancelation of the biennial Farnborough Air Show due to the COVID-19 pandemic may not have an immediate impact on the bottom lines of aerospace firms in the defense sector, the decision to close one of the world's top two airshows is yet another harbinger of pending upheaval in the overall market, analysts say.
In particular, it deprives US firms of publicity abroad and highly valuable face-time with customers and potential customers from foreign governments.
“Things like Farnborough are important to US aerospace companies because they help to facilitate sales and marketing,” said Todd Harrison, director of the Aerospace Security Project at the Center for Strategic and International Studies (CSIS). “It's traditionally been a place where you show off your latest technology and latest systems, but it's also where you finalize deals that have been in the works for a while. And so, some of that can still happen, but some of it may not happen.”
Richard Aboulafia, a veteran aircraft industry analyst at Teal Group, echoed: “It's just a reflection of a sad reality: economic time has simply come to a halt for our industry and for others. That means fewer big opportunities to meet clients, advertise products and capabilities, share information, and look for opportunities. Big air shows are essential for these, but here we are.”
The Farnborough Air Show — which takes place south of London — registered representatives from 96 countries in 2018, and some logged $192 billion in orders and contract commitments. The cancelation of the 2020 show, slated for July 20-24, was announced today.
“I don't see the cancellation of Farnborough as a big blow to defense contractors. It is generally a way of raising their profile, but has no immediate impact on their business prospects,” said Phil Finnegan, Teal Group's director of corporate analysis.
That said, Finnegan and a number other analysts agreed, the aerospace market is in for a rough ride — and not just on the commercial side as airlines see their profits for 2020 nosediving, making it increasingly unlikely that they will invest in new planes.
“Looking ahead, defense acquisition is in uncharted territory. Near- and far-term impacts of Coronavirus evolve daily,” Air Force acquisition head Will Roper said this afternoon. “As we complete our first week of response, our teams navigated potential work stoppages, changing local and state directives, halted supply chains, and gearing up to support any national Defense Production Act requirements.”
The Defense Production Act, which allows the government to order companies to boost production or produce new things, was invoked last week by President Donald Trump.
Finnegan said “the biggest threat to defense contractors will come to those with significant commercial aerospace operations. The cash flow drain from those operations potentially could hurt them.
“It also reiterates the importance of maintaining a balance in operations,” he added. “Obviously, in recent years commercial aerospace has offered greater growth and potentially high profit margins. This crisis reiterates the importance of a diversified approach to defense and aerospace to take advantage of the stability of the defense market in a crisis.”
Indeed, several other long-time industry analysts said that DoD may face price hikes as firms try to shift the costs of commercial overhead to the defense contracts — especially for spare parts.
Further, Harrison noted, governments around the world are going to be cash-strapped and likely loathe to make new commitments to large buys of new fighter jets or drones. According to the latest report from the Aerospace Industries Association, US aerospace and defense exports in 2018 amounted to $151 billion: civil aerospace accounted for the majority with $131.5 billion; defense products the remaining $19.5 billion.
“So, Farnborough may not be the reason that sales go down, It's more of a symptom of the fact that there just aren't going to be as many opportunities for a while,” he said.
https://breakingdefense.com/2020/03/covid-19-farnborough-cancelation-another-blow-for-defense-biz
April 18, 2024 | International, Land
The three AUKUS navies may see advanced undersea technology like small drones and AI-enabled target recognition tools tested and fielded this year.
June 10, 2024 | International, Aerospace
The services want to use the tool to better understand how AI could improve access to information and to gauge whether there’s demand within the force.
February 16, 2021 | International, Aerospace, Naval, Land, C4ISR, Security
AIR FORCE LinQuest Corp., Los Angeles, California, has been awarded a $200,000,000 indefinite-delivery/indefinite-quantity for advisory and assistance services in support of Space Operations Command. Work will be performed at Peterson Air Force Base, Colorado, and is expected to be completed Feb. 28, 2030. This award is the result of a competitive acquisition and one offer was received. Fiscal 2021 Space Force operation and maintenance funds in the amount $12,730,301 are being obligated at the time of award. Space Operations Command/Space Acquisition Management – Directorate, Peterson AFB, Colorado, is the contracting activity (FA2518-21-D-0001). U.S. SPECIAL OPERATIONS COMMAND Reservoir International LLC, Fayetteville, North Carolina, was awarded a $200,000,000 maximum indefinite-delivery/indefinite-quantity contract (H92239-21-D-0001) for Army Special Operations Forces training support services in support of the John F. Kennedy Special Warfare Center and 1st Special Warfare Training Group. Fiscal 2021 operation and maintenance funds in the amount of $3,449,752 are being obligated at the time of award. The work will be performed in the vicinity of Camp MacKall, North Carolina, until January 2026. The contract was awarded competitively among service-disabled veteran-owned small businesses with nine proposals received. U.S. Special Operations Command, Fort Bragg, North Carolina, is the contracting activity. DEFENSE HEALTH AGENCY Valor Network Inc., Metuchen, New Jersey (HT0015-21-D-0001), was awarded a $73,532,325 fixed-price, indefinite-delivery/indefinite-quantity contract to provide professional diagnostic radiology interpretive services to the Military Health System (MHS). The base year amount of the contract is $13,369,448. The contract has four 12-month option periods. This enterprise contract is to support the continued implementation of the MHS organizational reform required by 10 U.S. Code § 1073c, and sections 711 and 712 of the John S. McCain National Defense Authorization Act for fiscal 2019, effective Oct. 25, 2019, which eliminated separate silos of military healthcare and officially integrated healthcare under the authority, direction, and control of the Defense Health Agency, consistent with the direction provided by the secretary of defense. This contract was a competitive acquisition with eight proposals received. Fiscal 2021 operation and maintenance funds in the amount of $13,369,448 are being obligated at time of award. The Defense Health Agency, Enterprise Medical Support Contracting Division, San Antonio, Texas, is the contracting activity. (Awarded Feb. 12, 2021) ARMY General Dynamics Land Systems, Sterling Heights, Michigan, was awarded a $20,652,845 modification (P00127) to contract W56HZV-17-C-0067 for Abrams systems technical support. Work will be performed in Sterling Heights, Michigan, with an estimated completion date of June 22, 2022. Fiscal 2010 Foreign Military Sales (Kuwait) funds; fiscal 2021 operation and maintenance (Army) funds; and fiscal 2019, 2020 and 2021 other procurement (Army) funds in the amount of $20,652,845 were obligated at the time of the award. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. Raytheon Co., Dulles, Virginia, was awarded an $8,220,193 modification (P00042) to contract W52P1J-16-C-0046 for multinational information sharing services. Work will be performed in Kuwait, with an estimated completion date of July 15, 2021. Fiscal 2021 operation and maintenance (Army) funds in the amount of $1,895,193 were obligated at the time of the award. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity. Carbro Constructors Corp.,* Hillsborough, New Jersey, was awarded a $7,773,175 modification (P00004) to contract W912DS-19-C-0035 for construction of flood-control measures for Green Brook Segment C1. Work will be performed in Middlesex, New Jersey, with an estimated completion date of Oct. 13, 2021. Fiscal 2010 civil construction funds in the amount of $7,773,175 were obligated at the time of the award. U.S. Army Corps of Engineers, New York, New York, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2504777/