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BAE Calls F-16 Upgrade Push 'Logical Step'

PARIS -- BAE Systems Plc's push to challenge Lockheed Martin Corp. in upgrading foreign fleets of F-16 fighter jets is a logical move, given the contractor's experience with the work, BAE officials said.

The U.S. subsidiary of the London-based company has refurbished more than 1,000 aircraft in the past couple of decades. That includes about 270 F-16s for the Air National Guard and more than 200 C-130 cargo planes. Both aircraft are made by Bethesda, Md.-based Lockheed, the world's largest defense contractor.

"We've demonstrated this performance," Erin Moseley, president of BAE System Inc.'s support solutions unit, said during a news conference Tuesday at the Paris Air Show. "Moving into the F-16 upgrade space is a very logical step."

As defense spending declines in the U.S. and overseas, countries are considering upgrading their fourth-generation F-16s rather than buying more expensive fifth-generation aircraft such as the F-22 and F-35. BAE and Chicago-based Boeing Co. are seeking to challenge Lockheed for the work.

"Defense budgets around the world are shrinking," John Bean, vice president of global fighter programs at the company, said at the event. "Many customers are looking for an affordable alternative."

More than 4,500 F-16s, known in the U.S. as the Fighting Falcon, have been built since production began in the mid-1970s. General Dynamics Corp. initially manufactured the planes before selling its aircraft unit to Lockheed in the 1990s. About half of those jets were purchased by the U.S. military. The rest were bought by more than two dozen countries.

Of the more than 3,000 F-16s still in service around the world, more than 1,000 are at least 15 years old, making them prime candidates for upgrades such as new avionics, sensors and weapons systems, Bean said.

"It's going to be very common, in my belief, to see fighter aircraft now that are going to be 40 to 45 years old before they're retired," he said, acknowledging that the prospect is "unheard of" compared to previous years.

BAE, which has already upgraded 50 of Turkey's F-16s, last year won a deal to refurbish 134 of South Korea's jets. The agreement is expected to be finalized later this year, Bean said.

The company is also in discussions with other countries for the fighter upgrades, including Singapore, which is probably the nearest-term opportunity, Indonesia, Thailand, Greece, Oman and Chile, Bean said.

The potential business isn't limited to F-16s. BAE has also refurbished F-15 and F/A-18 fighters, as well as MH-60 helicopters and other rotorcraft, according to Gordon Eldridge, a vice president and general manager at the company.

"We're taking that experience we've had in the U.S. and extending that into the international market," he said. "You don't necessarily have to go back to your OEM to do an upgrade," he said, referring to the original equipment manufacturer.

Lockheed has already upgraded more than 1,000 F-16s. A couple months after it lost the South Korea decision, the company landed a $1.85 billion contract from the U.S. Air Force as part of a so-called foreign military sale to upgrade more than 140 of Taiwan’s F-16s with new radar, global positioning and electronic warfare systems.

In the U.S., Lockheed is the main contractor on a $2.8 billion Air Force program to upgrade about 350 of the single-engine fighters’ airframes and avionics systems. The multi-year effort slated for certain Block 40 and Block 50 versions is designed to keep the aircraft viable after 2025 in part because of delays to the F-35 Joint Strike Fighter, the Pentagon’s most expensive weapons acquisition program.

The avionics enhancements include an active electronically scanned array radar, which boosts the plane’s ability to destroy enemy air defenses; a higher-resolution display unit; single-point access for electronic warfare control; and an integrated broadcast system for intelligence feeds.

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