BAE Systems wants to lead F-15 upgrades market

published 8 January 2013

BAE Systems said on Tuesday it wants to dominate the F-16 fighter jet upgrades market by taking business away from competitor Lockheed Martin Corp, the Pentagon's biggest contractor.

In an interview with Bloomberg, Dave Herr, President of BAE's support solutions business, said the London-based company was working to increase international sales and become a leader in the $3.0bn market for F-16 upgrades.

"We're looking at potentially where to take this next," Herr said in a phone interview. "It's a big opportunity for us."

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The company last year won against Lockheed for a deal to refurbish about 130 of South Korea's jets through a US Foreign Military Sales programme.

It was the first time a company other than Lockheed has landed such a contract, Herr said.

Competition in the industry has increased as the US and Europe continues to grapple with financial woes that make it hard to afford new fighter jets, according to Kevin Brancato, a Washington-based defence analyst at Bloomberg Government.

With more than 2,200 F-16s sold outside the US to countries including Egypt, Turkey, Greece, Thailand and Chile, refurbishing the jets offers lucrative opportunities for competitors to take market share away from Lockheed, he added.

Lockheed may have lost its focus on F-16 work as it turns its eye to F-35 jets, the Pentagon's most expensive weapons programme, said Richard Aboulafia, a defence and aerospace analyst with Teal Group, a consulting firm based in Fairfax, Virginia.

However, Benjamin Boling, a spokesman for Lockheed, said the company was "committed to meeting the sustainment and modernization needs of F-16 operators around the world for decades to come".

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