UPDATE 2-AIRSHOW-US Navy committed to F-35 despite talks about more F/A-18 buys

Tue Nov 19, 2013 4:46pm EST

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By Andrea Shalal-Esa

DUBAI Nov 19 (Reuters) - The U.S. Navy remains committed to the Lockheed Martin Corp F-35 Joint Strike Fighter (JSF) program, but is also looking at options to buy additional Boeing Co F/A-18 fighter jets, a senior U.S. Navy official said on Tuesday.

Richard Gilpin, deputy assistant secretary of the Navy for air programs, told Reuters at the Dubai Airshow that the Navy's current plans still called for purchases of the Boeing F/A-18 and EA-18G electronic attack planes to end in fiscal 2014.

He said the U.S. military would have to act soon to ensure continued production of the F/A-18 beyond 2016, but said no decisions had been made at this point. U.S. officials are also meeting with possible buyers at the show, in hopes of cementing orders that could extend the production line.

Gilpin, and Navy Captain Frank Morley, who heads the F/A-18 and EA-18G program, both denied that the discussions signalled any wavering of the Navy's commitment to the F-35 program - and underscored that the two fighter jets were always intended to operate together for decades to come.

"Let me be clear. The Navy is very committed to moving to JSF. I wouldn't want you to get the impression that the Navy is not committed to JSF, because we are," Gilpin said in an interview at the air show.

The $392 billion F-35 JSF, the Pentagon's biggest arms program, has seen a 70 percent increase in costs over initial estimates and repeated schedule delays, but U.S. officials say the program has made progress in recent years.

Questions arose about the Navy's F-35 program last month after it erroneously posted a notice on a federal procurement website about a possible order of up to 36 more F/A-18 fighters or EA-18G electronic attack planes in fiscal 2015.

The Navy has also mapped out plans for a two-year halt in procurement of the F-35 C-model if U.S. lawmakers fail to reverse tough mandatory cuts in military spending - a move seen by some industry executives as a sign of the Navy's lukewarm support of the multi-service F-35 fighter program.

MISTAKEN POSTING

Morley told reporters at the air show that the notice was mistakenly posted by "a fairly low level contracting person", but he took full responsibility for what he called "an administrative error" and said new procedures had been put in place to prevent any future incidents.

Gilpin said the erroneous posting did not reflect any concrete Navy plan. He said it stemmed from one of many scenarios being developed while Navy officials wait for guidance on how to structure their budget in fiscal 2015.

For instance, he said Navy officials were looking at the cost trade-offs of buying newer model F/A-18s to replace older model jets, and whether that could save maintenance costs.

But he stressed that there had been no change in the Navy's plan to stop buying the planes in fiscal 2014.

"The simple reality check is that ... they end in 2014. There's lots of conversations going on, but until there's a real budget commitment, that's where we are," he said.

"If people come to us with good ideas, we look at them to see if there's a place where they can fit, but right now there's been no change in the program of record," he said.

Top Boeing executives on Monday said they saw a good chance of winning additional U.S. and foreign orders that would keep the F/A-18 production line running expected, and were committed to continuing to invest in the program.

CONFIDENT

Gilpin said a budget-driven pause in procurement of the Navy's F-35 C-model would not derail the program, although it could potentially increase the cost of each airplane.

He said the Navy continued to work with Lockheed on driving down the cost of the airplanes, and was "on a good path there".

Acting Air Force Secretary Eric Fanning on Monday told a meeting in Washington the Air Force's worst-case budget plan foresaw delaying work up to 24 F-35 A-models over the next five years if sequestration budget cuts remained in effect.

He said a detailed analysis showed the Navy's plan to postpone orders for up to 30 C-model jets would impact the cost of the Air Force model less than expected. But he said all the U.S. changes could affect the cost of planes to be purchased by the foreign partners on the program.

Gilpin said U.S. officials were meeting with potential foreign buyers of the F/A-18 at the air show, but the timing of any possible purchases was unclear.

"If others are interested, the timing is now," Gilpin said, noting that Boeing would have to make decisions soon about buying long-lead materials or components for future jets.

Morley said Qatar was getting close to a decision on its next fighter purchases, and Kuwait had also showed strong interest. The United Arab Emirates had been more focused on other fighter jets in recent months, he added.

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