U.S. MAJORS BEAT PROFIT EXPECTATIONS – SALES SLOW ACROSS THE BOARD
By Julian Nettlefold
28 Apr 11. The Reporting Season has got into full swing with U.S. Majors reporting earnings ahead of expectations and many looking overseas to bolster expected falling sales in the USA due to defense budget cuts. The slowdown in sale is reflected across the board in these results from the U.S. majors with all reporting slowing ales but better margins. This trend will continue as Supplemental contracts are discontinued and the withdrawal from Afghanistan and Iraq starts. Further slowdowns in sales can be expected this year as the U.S. Budget is cut.
Hopes of overseas sales were dashed today with the announcement that Boeing with the F-18 and Lockheed Martin with F-16 had been dropped, along with Gripen form the Indian Medium Multi-Role Combat Aircraft (MMRCA) contest leaving Eurofighter Typhoon, Rafale and the Russian Sukhoi. The dropping of the F-18 should come as no surprise to seasoned BATTLESPACE readers as sources suggested that the F-18 could not take-off from the heights required as it is basically a low-level Carrier-borne aircraft. One report suggested that the F-18 had to be ‘bump started’ with a Gripen engine feeding extra thrust into the engine. This loss will affect key sub-contractors such as Northrop Grumman and Raytheon.
The retention of Rafale comes as no surprise given the current reliance on the Mirage fleet, the disposal of which could form part of a deal for Rafale. Eurofighter must progress the installation of the key Meteor software so as not to be stymied at the last moment by a reluctance from Raytheon to supply AMRRAM missiles as happened in Singapore. The dropping of the U.S. candidates however, makes this less likely as it would keep Raytheon in the game.
Reuters reported that Boeing Co on Thursday said it was disappointed by
India’s rejection of its bid for a $11 billion fighter jet deal, adding that it would mull its options after reviewing details.
“We are obviously disappointed with this outcome. Our next step is to request and receive a debrief from the Indian Air Force,” the world’s largest aerospace and defence company said in a statement on Thursday.
“Once we have reviewed the details, we will make a decision concerning our possible options,” it added.
India has rejected bids from Boeing and fellow U.S. firm Lockheed Martin, shortlisting European firms instead, in a move that could sour its relationship with the United States while broadening its strategic ties with other regions.
“We are committed to the Indian market and continue our plans for growth and see huge business opportunities in the aerospace, defence and security sectors.”
Saab AB also received information from the Indian Ministry of Defence that Gripen has not been shortlisted for the Indian Medium Multi-Role Combat Aircraft (MMRCA) programme.
”We are offering India a world class next generation fighter aircraft to a very competitive price and an extensive technology transfer programme. We have received this decision and will closely monitor the future process and provide additional information if requested by the Indian Ministry of Defence. We are confident that the Gripen system is the perfect match for the Indian Air Force as well as meeting the highest requirements for the international markets,” says Håkan Buskhe, President and CEO at Saab.
India is one of Saab’s most important markets. For example, Saab recently
announced an investment in a research and development centre in India.
“We are committed to the Indian market and continue our plans for growth and see huge business opportunities in the aerospace, defence and security sectors,” says Håkan Buskhe.
Boeing Reports Significant Q1 Progress
By Howard Wheeldon, Senior Strategist at BGC Partners
27 Apr 11. At last, a set of more than half decent quarterly results plus positive sounding management comment from Boeing that should