December 10, 2019 | International, Aerospace
Michael Bruno
Lockheed Martin is looking to new government interest in follow-on modernization (FOM) upgrades of the F-35 Joint Strike Fighter to drive future business returns on top of what could be ballooning sustainment revenue, according to the company's chief financial officer (CFO).
CFO Ken Possenriede told a Credit Suisse investor conference this month that FOM and sustainment will drive business growth out of the F-35 for Lockheed and its shareholders as production returns shrink with unit price reductions and maturing production.
“We ended the SDD [system design and development] program, but the customer still is looking at capability that they want,” he told financial analysts and investors. “So you'll see growth there and in sustainment.”
Lockheed Martin expects to deliver 131 F-35 Joint Strike Fighters this year, compared with 91 in 2018, and should deliver 140 in 2020. Over the next few years, Lockheed expects total international demand for the F-35 to drive production to about 175 a year, most of which will be built in Fort Worth, but with some finished in Japan or Italy.
But because the price per aircraft has been reduced 13% over low-rate production lots 11-14, to below $80 million per jet for the A variant, that part of the program–“the lion's share” now–is increasingly becoming minimized as a moneymaker.
“The reduction in price has been faster than the ramp-up in quantity,” Possenriede said. “So it's going to be, at least in the short term, [that] you'll probably see modest growth in production revenue.”
Lockheed won the original $19 billion SDD contract in 2001, but spending on the FOM, also called Block 4 improvements, could reach an additional $16 billion under Pentagon plans discussed last year.
At the same time, the F-35 fleet is expected to more than double from about 400 aircraft to 1,000 in the next couple of years.
“You'll have more sparing, some more repairing,” he said. “But then you'll see a larger influx of the modification work that will get done, and you'll see sustainment over the next couple of years double. So that will be a faster piece of the revenue.”
The company is about one-third complete in standing up repair base facilities now.
Lockheed also continues to promote a performance-based logistics contract for the F-35, the CFO noted.
“We provided a white paper, call it an unsolicited proposal, that basically commits to the 80% availability and it commits to the $25,000 per flight hour, which we think is the right number to get to,” he said Dec. 5.
The F-35 currently costs $35,000 a flight hour.
https://aviationweek.com/defense/lockheed-looks-more-f-35-development-work
May 9, 2024 | International, Aerospace
Flexrotor is a small tactical unmanned aerial system designed for intelligence, surveillance, target acquisition and reconnaissance (ISTAR) missions at sea and over land.
February 19, 2019 | International, Aerospace
By: Agnes Helou ABU DHABI — BAE Systems signed a memorandum of agreement with the United Arab Emirates repair and overhaul center to transfer technology of some F-16 initiatives to the UAE. The memorandum between BAE and the Advanced Military Maintenance Repair and Overhaul Center, or AMMROC, was signed on the second day of IDEX 2019. BAE Systems will open a facility at Al Ain, along the eastern border, “formalizing the relationship” with AMMROC, which also supports Lockheed Martin and Sikorsky with Black Hawk and C-130 maintenance, and repair and overhaul of ever fixed wing aircraft that the UAE Air Force counts among its fleet. “Our agreement with AMMROC allows us to work with an established leader in MRO and benefit from the skill and experience of their local workforce in the UAE,” said Paul Markwardt, vice president of survivability, targeting and sensing solutions at BAE Systems' Electronic Systems business. Under the MOU, the two organizations will work closely together on multiple projects, ranging from testing and repair services to manufacturing, support, and product installation. Potential projects include BAE Systems' avionics, communication, display, sensor, and survivability products. Among other things, “the MOU provides the testing of the equipment BAE Systems has on the F-16 platform," with BAE transfering technology for the testing of some products and building of some others, another BAE Systems official added. Other potential products BAE Systems could bring to the UAE, are the eye goggle tester, EMI/EMC lightening test equipment, F-16 ground support equipment, and IFF (identification friend or foe) license production. AMMROC CEO Abdul Hakeem Ahmed Saif Al Muflahi noted that the MOU doesn't include buying systems but transferring technology. “This MOU enhances AMMROC's position in delivering a fully integrated, world class MRO solution in accordance with industry best practices," he said. "The potential projects represent an exciting opportunity for both companies to work together in the field of MRO. AMMROC is proud to partner with BAE Systems, one of the world's leading defense companies, and we look forward to working with their team to develop and execute on the MOU.” https://www.defensenews.com/digital-show-dailies/idex/2019/02/18/bae-systems-signs-agreement-with-emirati-repair-and-overhaul-center-for-f-16-tech-transfer/
August 18, 2020 | International, Land
By Sudhi Ranjan Sen 16 août 2020 à 18:00 UTC−4 Updated on 17 août 2020 à 04:58 UTC−4 India's move to ban the import of certain weapon systems will do little to boost local manufacturing and is sowing uncertainty at a time when the South Asian nation is trying to ramp up defenses on its restive borders with China and Pakistan, according to analysts. Prime Minister Narendra Modi's administration earlier this month announced curbs on $47 billion worth of imports that include communication satellites, conventional submarines and light machine guns. But defense experts said they didn't address critical issues such as the certification of systems and locally-made components, and won't prevent the military from making emergency purchases of equipment from foreign vendors. Modi has struggled to transform the world's second biggest arms importer into a defense manufacturing powerhouse since a 2014 proposal to produce indigenous equipment and systems worth $100 billion by 2020. The target has since been slashed in half and the deadline extended to 2027, while the need for more advanced weaponry grows more urgent following the most deadly border clash with China in four decades. Modi Backtracks on Free-Trade Vow With Import Curbs in India The ministry's ban on imports will have little impact beyond “measures already taken to localize defense production and reduce import dependency,” said Amit Cowshish, a consultant with the New Delhi-based Manohar Parrikar Institute For Defence Studies and Analyses and a former financial adviser on acquisitions in the Ministry of Defense. “The promotion of local manufacturing requires more cooperation between the military and domestic defense industry,” Cowshish said. “Mutual trust is missing, with everyone working at cross purposes.” While New Delhi is the world's third-biggest military spender, its air force, navy and the army are still equipped with weapons that are largely obsolete. ‘Self-Reliance Push' The push for locally-produced systems and hardware was a big step toward self-reliance in defense and creates an opportunity for the Indian defense industry to manufacture the items using their own design and development capabilities, the Ministry of Defense said in a statement on Aug. 9. A defense ministry spokesperson was not immediately available for a comment. Similar policy declarations to stem imports were made by India in 2013, under then prime minister Manmohan Singh, and also by Modi's administration in his first term in 2018, didn't significantly increase the ‘Made in India' products deployed by the military. “Time and access to technology is fundamental to such efforts -- currently a large proportion India's defense industry is little better than system integrators,” said Rahul Bedi, a New Delhi-based independent defense analyst. “A major dose of realism is needed.” The banned list is also vague on the position of joint-ventures between Indian and foreign manufacturers and license produced weapon systems, he said. Despite its drawbacks, India's nascent defense industry is cautiously optimistic about the new policy. “We are sure that this list will keep getting amended to add newer programs that lay a road map matching our nation's aspiration,” said Jayant Patil, senior executive vice president (defence & smart technologies), Larsen & Toubro Limited. https://www.bloomberg.com/news/articles/2020-08-16/india-s-tense-borders-threaten-plan-to-ban-some-weapons-imports