Thursday 23 April 2020

Lockheed looks to sell additional F-16s to customers in Africa, Asia and South America

Eric Bowen @flickr

Lockheed looks to sell additional F-16s to customers in Africa, Asia and South America

International sales are still going strong for the F-16 franchise.

By: Valerie Insinna

WASHINGTON — Lockheed Martin anticipates another wave of international F-16 sales, with countries from Africa, South America and Southeast Asia among those interested in purchasing the jet, the company’s chief financial officer said Tuesday.

“I think this is a good fourth-generation aircraft for those customers that can’t afford the F-35 or, frankly, can’t at this time buy the F-35,” Lockheed CFO Kenneth Possenriede told investors during an April 21 earnings call. “It might be a good intermediary step for customers to go from the F-16 to F-35. So we see it frankly as complementary and not competing against themselves.”

Unlike the F-35 program, which is seeing disruption within its supply chain that could delay future deliveries, the F-16 production line has experienced little impact as a result of the coronavirus pandemic, Possenriede said.

The company moved production of the F-16 production line from Fort Worth, Texas, to Greenville, South Carolina, in 2019 to accommodate production of 16 Block 70 aircraft for Bahrain. Since Bahrain’s order in 2018, Lockheed has garnered contracts for eight F-16s for Bulgaria, 14 aircraft for Slovakia, and is working with the U.S. government on a sale of 66 jets for Taiwan.

“We also have a couple of orders for F-16 that we're working to try to shape,” Possenriede said. “There is an African country that is interested in F-16, so we're hopeful that will happen. [There is also a] South American country, and then there are some Southeast Asian countries that are interested in F-16 as well.”

Possenriede didn’t detail which nations were considering purchases of the F-16, as defense companies typically wait until international militaries publicly declare their interest in a sale before talking about specific customers.

Richard Aboulafia, an aerospace analyst with the Teal Group, said there’s a “pretty good chance” that some of those orders materialize.

“Lockheed was doing a disservice by forgetting the F-16 program for so many years. They had this idea that the future was F-35 and nothing but F-35, ignoring the part of the market that is not prepared to buy the F-35 price tag,” he said. “It’s actually a really good franchise with a really solid core market. It seems ill-advised to neglect it.”

If a new customer in Africa is looking to buy F-16s, it could be Botswana, which has indicated an interest in buying fighter jets, Aboulafia said. Lockheed has already sold F-16s to Morocco and Egypt, and the U.S. State Department in 2019 cleared Morocco for new F-16s and upgrades.

In South America, Lockheed has been trying to sell F-16s to Argentina for years, but Aboulafia believes a second order for Chile is a more likely prospect. In Southeast Asia, a sale to Indonesia “would seem to be one of the most likely possibilities,” he added.


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