(Corrects second paragraph to clarify when arms sales doubled
and replaces erroneous total in fifth paragraph and adds further
By Andrea Shalal-Esa
PARIS, June 18 U.S. arms makers see rising
foreign demand for fighter jets, missile defense systems and
other weapons as countries modernise their forces and U.S.
officials, facing tighter budgets, encourage allies to invest
more in intelligence gathering and aerial refueling equipment.
U.S. Air Force arms sales doubled from 2005 to 2011 and will
likely remain strong in coming years, a senior Air Force
official said at the Paris air show on Monday.
The Paris gathering, which occurs every other year and is
celebrating its 50th anniversary this year, has been dominated
by the yearly scramble by Boeing Co and Airbus
for commercial airplane orders, while the participation of U.S.
military aircraft was prevented by across-the-board budget cuts.
But in meeting rooms and receptions across Paris and the Le
Bourget airfield, U.S. executives and government officials say
they can barely keep up with demand for briefings on military
helicopters, fighter jets, missile defense systems, satellites
and unmanned planes.
Heidi Grant, deputy undersecretary of the Air Force for
international affairs, said that Air Force arms sales doubled
from $4.7 billion in 2005 to $10.5 billion in 2011, before
vaulting to $38.3 billion in 2012 because of a huge F-15 sale to
Saudi Arabia. Grant said she expected Air Force arms sales to
remain around $10 billion in the foreseeable future.
The Air Force currently oversees 2,800 foreign military
sales cases valued at $138 billion in 100 countries, she said.
"I see the caseload and the dollars continuing to increase."
William Swanson, chief executive of Raytheon Co,
told Reuters in an interview that he and his top executives had
planned 162 meetings over the coming days. "We are overbooked."
Raytheon expects its international sales to generate about
30 percent of revenues in coming years, up from around 26
percent now, he said.
"We see it from the point of view of growing our business
and not shrinking our domestic (revenues) so the international
goes up automatically," Swanson said. Raytheon hopes to conclude
negotiations soon with several countries, including Kuwait,
Qatar and Turkey for billions of dollars worth of missile
defense systems and other equipment, he added.
Other U.S. companies including Sikorsky Aircraft, a unit of
United Technologies Corp, say international sales may
soon account for half or more of their annual military aircraft
The Air Force's Grant, who meets regularly with air defense
chiefs from other countries, said mounting pressure on the U.S.
defense budget made it more important for U.S. allies to
increase their ability to carry out intelligence, surveillance
and reconnaissance missions, as well as aerial refueling.
She said selling U.S. fighter jets and other weapons to U.S.
allies laid the groundwork for closer military ties with the
United States. She cited strong demand for Boeing's C-17
transport plane, Lockheed Martin Corp's C-130J transport, and
the MQ-9 Reaper, an unmanned plane built by privately held
General Atomics, which is based in San Diego.
"When they do choose the U.S. it establishes a 20-plus year
relationship with the United States," Grant told Reuters in her
first media interview since moving into the job three years ago.
Grant has been actively pressing for a U.S. winner in two
multibillion dollar fighter competitions in Brazil and South
Korea that are expected to wrap up this summer.
Boeing's F-15 fighter, Lockheed Martin Corp's F-35 fighter
jet and the Eurofighter Typhoon, built by BAE Systems,
European aerospace group EADS and Italy's Finmeccanica SpA
, are competing for the South Korea order, which
industry executives expect to be awarded in mid-July.
In Brazil, Boeing is hoping to sell its F/A-18 Super Hornet
in a deal that would mark a significant jump in the security and
strategic relationship between the two countries.
Chris Raymond, vice president of business development for
Boeing's defense unit, said his company saw good prospects in
Brazil for unmanned planes, infrastructure security and even
satellites, as well as for fighter jets.
Chris Chadwick, president of Boeing's military aircraft
division, also cited strong demand for the company's helicopters
and the V-22 tiltrotor it builds together with Bell Helicopter,
a unit of Textron Inc. He said the company could also
sell 100 to 200 of its KC-46 refueling tankers to international
customers in coming years.
Lockheed Martin also sees big export opportunities for its
new F-35 fighters, as well as its C-130J transport planes,
company officials told Reuters.
Jack Crisler, vice president of new business for Lockheed's
air mobility, special operations and aeronautics programs, said
the company was forecasting 150 to 200 additional C-130J sales
over the next decade.
Steve O'Bryan, vice president of Lockheed's F-35 program,
said he was upbeat on the fighter jet's prospects in the South
Korea competition, and in Canada and Denmark, which helped to
fund the plane's development but are re-examining their options.
"International is becoming a larger and larger part of
Lockheed's overall business," he told Reuters in an interview.
(Reporting By Andrea Shalal-Esa; Editing by Edmund Klamann)