Boeing aims to keep building F/A-18 jets through 2020
WASHINGTON (Reuters) - Boeing Co (BA.N) could keep building its Super Hornet fighter jet and a modified electronic attack version through 2020, the company said, given prospects for over 200 foreign sales and what it sees as up to 150 more sales to the U.S. Navy.
Michael Gibbons, Boeing vice president for F/A-18 and EA-18 programs, spent part of this week pitching additional sales of Boeing's last fighter jet to congressional staffers in a triple-wide trailer packed with simulators, displays and souvenirs.
His mission? To safeguard funding for 21 EA-18G Growlers in the Pentagon's fiscal 2014 budget, and underscore the advantages of the Super Hornet, for which Boeing has developed a package of upgrades aimed at making it more competitive with Lockheed Martin Corp's (LMT.N) fifth-generation F-35 multirole fighter.
The F/A-18 is one of Boeing's last fighter jets in production after it lost the F-35 contract to Lockheed in 2001. It is also building F-15s for Saudi Arabia. Boeing has sought to parlay delays and cost overruns on the F-35 program into more sales of its jets, but its efforts have taken on new urgency in recent years as F/A-18 production begins to wind down.
"It's a make or break year for the F/A-18 and Boeing," said Virginia-based defense consultant Jim McAleese. He said the company was scrambling to drum up more sales since the Navy's current plans call for no further Super Hornet purchases.
Boeing backers in Congress have repeatedly added F/A-18s to the Navy's budget in recent years, arguing that the Navy needs more fighters to bridge the gap until the F-35 can be fielded.
Gibbons told Reuters that Boeing wanted congressional aides to see the F/A-18 as a viable option if the Navy revamped its current plan to use two squadrons of F-35s and two squadrons of Super Hornets on its aircraft carriers.
"We're here to ... make sure that people on the Hill who are not close to aviation really understand why the Super Hornet ... is actually a next-generation aircraft, and why it's an affordable option, especially in a budget-challenged environment," he said as a line of congressional aides tested the plane's new touch-screen cockpit display.
The Navy began using the Super Hornet's single-seat E-model and two-seat F-model in 2000. Although Boeing marketed the plane as an "upgrade" to the Hornet to secure funding during an earlier defense spending drawdown, experts say the Super Hornet is essentially a new aircraft. It has a larger wing and longer fuselage to carry more fuel and more powerful engines.
The company's last multi-year contract with the Navy ends in mid-2015, but production of the Super Hornet and Growler is slated to run through late 2016 after Australia announced last week that it would buy a dozen more Growlers, a solid order, but only half the number Boeing had hoped to sell.
Boeing is also eyeing prospects in Brazil, Malaysia, several Middle Eastern countries that it declined to name, where Boeing has flown flight demonstrations in recent years. Analysts say Kuwait and several others may announce contracts as early as this year.
And Boeing is providing F/A-18 data to two other countries that are rethinking their F-35 plans: Canada, which is looking for 35 new jets, and Denmark, which needs 30 planes.
Altogether, Gibbons sees over 200 international orders up for grabs in coming years, and he views Boeing as a strong contender to win Brazil's 35-aircraft competition, where a decision is expected by the third quarter.
Boeing has dramatically increased its presence in Brazil over the past year, partnering with Brazilian planemaker Embraer SA (EMBR3.SA) and other companies on a range of projects.
The company is offering Brazil and other international customers a package of upgrades priced at $8 million to $9 million to add capabilities to the Super Hornet, including a larger touchscreen cockpit display, missile tracking, an engine with 20 percent more thrust, new fuel tanks and an internal weapons pod to make the plane harder to see on radar screens.
Northrop Grumman Corp (NOC.N), a key supplier, and Boeing are building a prototype at their own cost to demonstrate the lower radar signature of the new Advanced Super Hornet - jokingly dubbed the "Super Duper Hornet" by some - on a Navy test range in late summer or early fall, Gibbons said.
He said the improvements would be available for use on the planes within three to six years. Continued production and upgrades of the Super Hornet would keep options open for the Navy as it braced for leaner times, he said.
He said Boeing saw a possibility of 75 to 150 additional aircraft sales to the Navy, especially given its operating cost, which is the lowest of any U.S. fighter in use.
And while Gibbons conceded that there were "a lot of decisions yet to be made," he said the Super Hornet production line would likely keep running until 2020 and beyond.
At $16,000 per flight hour, Boeing said the jet's operating cost is far below that of the F-35, and its procurement price is also lower. Lockheed and Pentagon officials say the F-35's production price is coming down, and it offers the military far more capabilities, including advanced electronic warfare and jamming capabilities and better radar-evading signatures.
"What Boeing is hoping is that the Navy will decide that it cannot afford a carrier-based version of the F-35," said Loren Thompson, a defense consultant with close ties to Lockheed.
(This May 9 story has been corrected in the fourth paragraph to show F-15 still in production)
(Reporting by Andrea Shalal-Esa; Editing by Richard Chang)
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